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Argentina economy snapshot: central bank dollar buying spree slows

Published 06/12/2024, 06:11 AM
Updated 06/12/2024, 06:16 AM
© Reuters. People walk outside Argentina's Central Bank, in Buenos Aires, Argentina July 29, 2022.   REUTERS/Cristina Sille

By Hernan Nessi

BUENOS AIRES (Reuters) - Argentina's central bank has started to put the brakes on its aggressive buying of dollars, a key push to build up reserves under new libertarian President Javier Milei, something analysts pegged to weaker-than-expected sales of grains by local farmers.

The grains producing South American nation's central bank made net purchases of dollars in the first week of June of around $99 million, the lowest by some distance this year after steadily declining over the last month, central bank data show.

That underscores the growing challenge for the entity to keep up what had been a furious pace of foreign currency accumulation, aimed at rebuilding reserves that were deep in the red when Milei took office in December.

© Reuters. People walk outside Argentina's Central Bank, in Buenos Aires, Argentina July 29, 2022.   REUTERS/Cristina Sille

Argentina's central bank has bought up over $17 billion of foreign currency as part of that rapid reserves accumulation drive since Milei took office on Dec. 10. It needs dollars to pay creditors including the International Monetary Fund (IMF).

The bank's reserve accumulation is key to restoring economic and financial stability after years of crisis, and pivotal to the government being able to follow through with its pledge to undo tough currency controls that stymie business and trade.

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