(Bloomberg) — Argentina’s central bank on Thursday sold the most foreign reserves in one day since October 2019 after officials eliminated a key tax on imports, igniting corporate demand for dollars.
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The country sold $599 million in foreign exchange reserves, monetary authorities said in a post on X. Most of the sales were made to meet the needs of Argentina’s automotive industry, which pays its suppliers abroad in dollars, a central bank spokesman added.
The sale exposes some faults in President Javier Milei’s campaign to re-build the country’s war chest of foreign reserves that are essential to eventually lifting capital and currency controls next year. The buffer is money that they can ill afford to lose with payments on international bonds set to jump to some $9 billion in 2025, half of which come due in January.
Central bank policy makers added that they’re aiming for a more flexible currency policy in 2025, saying in a separate emailed statement that they’re keen on adjusting the pace of the peso’s slide, in a policy known as the crawling peg, if monthly inflation cools further.
Officials also said that a new agreement with the International Monetary Fund or private financing could help accelerate the removal of capital and currency controls, but the report did not provide more specific timing on policy changes besides next year.
The peso that trades in Argentina’s parallel market, known as the blue-chip swap, slipped Thursday by about 1.6% to 1,193 pesos per dollar.
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