(Bloomberg) — Argentina’s central bank sold some $803 million in hard-currency reserves this week after officials rushed to meet a surge in demand from importers for dollars ahead of a major bond payment.
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The monetary authority stepped in on three straight business days as Argentina’s auto industry clamored for the US currency to pay suppliers abroad following President Javier Milei’s move to eliminate a key tax on imports at the start of the week.
Officials sold the biggest single day amount of foreign reserves since Oct. 2019 on Thursday, according to government data. Friday’s operations included an additional $25 million in hard-currency reserves sold.
The central bank’s operation at the end of the year risks denting the government’s efforts to replenish its treasure chest of reserves, a resource necessary for Milei’s team to eventually lift the country’s thicket of capital controls that’s hampered investment.
Argentina also needs the funds to make a series of payments to sovereign bondholders, which jump to some $9 billion in 2024, half of which comes due in some 13 days.
Despite praise for Milei’s reforms from Wall Street, investors have lamented over Argentina’s shortage of net foreign reserves, which is the difference between the central bank’s cash on hand and the nation’s debt liabilities.
Calculations for the exact amount of net reserves vary from negative $10.4 billion to $4.6 billion in the red depending on how various piles of money are counted, according to local brokerage PPI.
The peso that trades in Argentina’s parallel market, known as the blue-chip swap, edged higher Friday by about 0.65% to 1185 pesos per dollar.
–With assistance from Ignacio Olivera Doll.
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