Argentina’s campaign to build foreign reserves faces headwinds

Argentine President Javier Milei's strategy to rebuild the country's foreign-exchange reserves faces some turbulence.

On June 19, the last business day before Argentina's long weekend, the Central Bank sold US$156 million of the country's foreign-exchange reserves, the most since the president took office in December.

At the same time, one of the country's parallel peso exchange rates, known as contado con liquidación, is much weaker (1,320 pesos/USD) than the official one (909 pesos/USD).

The authorities say there are no plans to devalue the peso in the short term, so traders are opting to hold on to the greenback, slowing the authorities' purchase of foreign exchange reserves.