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Argentine agro-exports help boost international reserves to over 50 billion USD

Saturday, July 10th 2010 - 07:18 UTC
Full article 29 comments
The rich pampas don’t cease to produce in spite of the Kirchners The rich pampas don’t cease to produce in spite of the Kirchners

Argentina’s international reserves once again exceeded the 50 billion US dollars mark, boosted by an intervention to the Central Bank by the market in a record purchase of 262 million USD.

The monetary entity detailed that the reserves closed at 50.162 billion, which is 286 million USD more than Wednesday's closing, according to Economy Ministry sources.

The Central Bank's intervention was what made the difference, due to the strong foreign exchange settlement on behalf of the agro export sector, since the variation of the Argentine currency before the US currency, along with the external bonds that make up the reserves, drew a negative balance.

Although the reserves exceeded 50 billion, the record continues being 50.517 billion USD, registered on March 27, 2008.

The current level of reserves was already reached on March 12, 2008, only 24 hours after the Argentine government announced the approval of resolution 125 concerning farmers' export duties, which gave way to a harsh conflict between the State and field employers.

In this way, after the maximum historic level of 50.517 billion, an important decrease began, which was aggravated by the international crisis led by Wall Street due to low-quality mortgages. The decline deepened in the following months until it reached a floor of 44.973 billion on November 3, 2008.

The data from 2009 shows a certain zigzag, attributed to the pre and post electoral expectations, to the economic progress, and to the new political scene.

In 2010, a regression was registered between February and April, linked to the situation generated by the changes in the Central Bank's governance and the national government's decision to pay debt maturities with available reserves.

The increase in reserves, economists agree, allows the reduction of levels of vulnerability in the Argentine economy and possesses anti-cyclic characteristics, as shown during the latest global crisis.

Furthermore, as opposed to other opportunities, the accumulation of reserves was not the consequence of greater indebtedness but rather because of the strong trade surpluses and a current account surplus, as pointed out by Argentina’s Central Bank and Economy ministry.

Categories: Agriculture, Economy, Argentina.

Top Comments

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  • axel arg

    This articule should be rode too by all those fundemantalist pathetic diviners who like to predict all the time a new default for my country, i say they are diviners, because they dont have not even one line of objetivity, actually a new default for argentina, is the wish of those moron diviners.

    Jul 10th, 2010 - 02:58 pm 0
  • Nicholas

    Gay axel arg che idiot and clown of economics of protectionism.
    First of all, moron fits you better. Why? You're a che idiot who believes everything that comes from lying government. Second, most agro companies who are exporting from your silly nation aren't argies, but foreigners (mainly in Brazilian hands).
    Third, it doesn't suprise me that a clown like you believes this propaganda. You try hard to prove that your country is just doing fine, but reality is..we both know that, it's a protectionist nation with a high poverty rate ( 30% or higher), high unemployment rate (second only behind Venezuela) and high inflation ( second behind Venezuela) and has a 60% chance to default again ..(second again behind Venezuela). Back o your protectionist economy, read won't last for long..and when it's broke..I doubt you will have 50 billion dollar (what is still a joke for a rich in minerals).. Oh by the way, don't forget that manipulating the numbers don't work either, soon or later, it will haunt you “again” and the rest of the che idiots..again..(default is still in the air). Stop smoking pot axel idiot and take off the Kirchners sun glasses...LAUGH...

    Jul 10th, 2010 - 07:51 pm 0
  • jerry

    I believe that the real reason for the 286 M USD gain is that these dollars were bought to keep the exchange rate of the Argentina peso to the USD from getting worse. This is a common practice by the K government to help control the exchange rate from its real rate, i.e., something like 5 pesos to the dollar rather than the present 3.9.

    Jul 10th, 2010 - 09:31 pm 0
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