Reported 9 months ago
Argentina's central bank is facing challenges in rebuilding its foreign reserves as it spends in currency markets to support the peso, which investors believe is overvalued. The country aims to boost reserves to remove currency and capital controls, attract foreign investment, and regain access to international debt markets. Although the government initially accelerated dollar purchases, buying $2 billion monthly until May, the pace significantly slowed in June with only $39 million purchased so far. Pressure mounts as the peso lags behind inflation, leading to concerns about the sustainability of the 2% monthly devaluation rate set by Argentine officials. Market indicators signal a higher likelihood of devaluation, urging for prompt action to address the currency situation.
Source: YAHOO