MercoPress. South Atlantic News Agency

Argentina recovers international reserves

During 2004 the Argentine Central Bank managed to increase its international reserves 5,528 billion US dollars totalling 19,646 billion US dollars, equivalent to the mid 2001 level a few weeks before the financial crisis.

This represents a 39% increase over the 2003 reserves level when the net addition totalled 3,649, reports the Argentine Central Bank.

The Bank's assets dropped abruptly when Argentine abandoned the convertibility system in December 2001 with reserves reaching a critical minimum of eight billion US dollars in August 2002.

The largest recent international reserve increase dates back to the roaring nineties, 1993, when the Central Bank received 4,480 billion US dollars mostly private loans and significant multilateral credits.

However in 2004 the increase was achieved by strong purchases of US dollars by the Central Bank in Buenos Aires financial markets.

The US dollars purchases "absorbed great part of the local money exchange surplus basically generated by the trade surplus, in a flexibility context for private access to the foreign currency market; and strong cancelling of debts with multilateral organizations". During 2004 the Argentine economy expanded an estimated 8,5% and managed a significant trade surplus.