By Jorge Otaola BUENOS AIRES (Reuters) -Argentina’s central bank rolled out a broad package of economic measures on Monday to boost reserves, including a repurchase agreement, or repo, of up to $2 billion. The move comes ahead of an expected review with the International Monetary Fund of the country’s recently signed $20 billion loan agreement. […]
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Argentina launches $2 billion repurchase agreement to boost reserves
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By Jorge Otaola
BUENOS AIRES (Reuters) -Argentina’s central bank rolled out a broad package of economic measures on Monday to boost reserves, including a repurchase agreement, or repo, of up to $2 billion.
The move comes ahead of an expected review with the International Monetary Fund of the country’s recently signed $20 billion loan agreement.
Argentina agreed with the IMF to strengthen its net foreign exchange reserves by $4.4 billion by the first review of the program, and has said it will not purchase dollars locally to do so.
By last December, those reserves were in the red.
The central bank will hold a dollar repo auction with international banks on June 11, the central bank said, following a $1 billion operation in December, as part of efforts to reinforce international reserves.
The measures are included in President Javier Milei’s ‘Phase 3’ economic plan, which includes easing monetary controls, floating the peso, and cleaning up the central bank’s balance sheet.
The central bank also said the market will now determine the interest rate, instead of the authority fixing a monetary policy rate.
“This reorganization consolidates a more conventional monetary aggregates control framework, eliminating the notion of a ‘monetary policy interest rate’ typical of schemes such as inflation targeting,” the central bank said. “Instead, the interest rate will be determined endogenously by the market, in line with a regime centered on monetary aggregates.”
The monetary authority did not immediately provide more detail on the benchmark rate, which had been set at 29%.
The measures add to a recently issued $1 billion bond, further boosting reserves.
In April, Argentina scrapped a crawling peg and let the peso float in a range between 1,000 and 1,400 pesos per dollar, while also undoing capital controls which restricted access to dollars.
(Reporting by Jorge Otoala; Additional reporting by Rodrigo Campos; Writing by Kylie Madry, Editing by Natalia Siniawski)