Argentina’s Central Bank reserves soared Tuesday as US$12 billion in fresh funds arrived from the International Monetary Fund.
The tranche of funding, part of a new US$20-billion agreement with the multilateral lender, was eagerly awaited by markets and government officials.
Total reserves climbed to US$36.799 billion on Tuesday, according to the Central Bank, rising a total of US$12.494 billion.
Economy Minister Luis Caputo confirmed last week that, in addition to the IMF funding, Argentina will receive at least another US$1.5 billion from other multilateral organisations, such as the World Bank.
The Central Bank, known by its acronym BCRA, now has increased firepower to protect the peso in the wake of Monday’s removal of most restrictions limiting access to foreign currency – a set of rules known locally as “el cepo.”
Meanwhile, Argentina’s country risk rate – tracked by investment bank JP Morgan – fell to 725 points, the lowest level in five weeks and a far cry from the near 1,000 recorded last week before the removal of currency controls.
Following Monday's initial devaluation of the peso, due to the relaxation of rules, the official exchange rate was trading this Tuesday at 1,233.40 per greenback at the time of writing.
The wholesale dollar opened seven pesos above Monday's close at $1,205.
As for the Banco Nación, the currency traded at 1,230 pesos.
Economists have noted the relative “calm” of operations, while warning of a renewed “carry trade” because the rates in pesos are above the implicit rates of the future dollar.
As for the blue dollar, it fell five pesos, quoting at 1,260 per greenback to buy and 1,280 for sale.
The MEP rate stood at 1,242.87 (down 0.8 percent), and the CCL at 1242.86 (down one percent.
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