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Banks in Argentina will not be able to vary their dollar holdings this month

The Central Bank of Argentina ruled this Thursday that until the end of this month the banks operating in the country do not alter their current level of holdings of Dollars, at a time when the price of the US currency has reached new highs in the face of growing demand.

The measure was adopted by the board of the Central Bank, which in a brief statement announced its resolution.

“Financial entities will have to maintain until the end of the month the global position in foreign currency at the same level of the monthly average of daily balances registered in October or the one in force today, whichever is lower,” said the monetary authority in its release.

In practice, the measure limits the demand for dollars by financial institutions at times of increasing tension in the domestic exchange market.

The so-called “blue dollar” (informal retail market) reached a new maximum of 200 pesos per unit for sale this Thursday, although at the close of the day it cut its value to 199 pesos.

Meanwhile, the price of the dollar in the formal retail market, where operations are very limited by various restrictions imposed by the Argentine authorities, advanced 25 cents and also reached a new maximum of 105.25 pesos per unit for sale to the public in the state market. National Bank.

Foreign exchange pressures have been growing in recent days, as the legislative elections of November 14 approach and investors’ doubts about the complex future of the Argentine economy increase.

The strong monetary issue registered since the electoral defeat of the ruling party in the primary elections of last September and the acceleration of the already high inflation in Argentina feed the fears among investors of a potential greater devaluation of the peso after the elections next month.

Investors look closely at the Central Bank, particularly its levels of issuance of Argentine pesos to assist the Treasury and the loss of monetary reserves due to daily sales of dollars to try to sustain the exchange rate.

The total reserves of the Central Bank closed this Thursday at US $ 42,576 million, but its net reserves would be, according to calculations by the firm Portfolio Personal Inversiones, of US $ 3,599 million, while the net liquid reserves (excluding special drawing rights of the IMF and gold) would barely be US $ 778 million.

For the economist Gustavo Ber, this daily “drain” of net reserves continues to arouse “growing concerns” among operators, “since it is recognized that the dynamics are not sustainable and thus measures should be adopted after the elections.”

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