MercoPress. South Atlantic News Agency

Dollar stabilizing in Argentina; central bank purchases 350 million

Export corporations are taking advantage of the high interest rates in Pesos

Argentina's central bank purchased 390 million dollars, one of the largest operations in years, as part of its policy to keep the price of the greenback in the local market stabilized after months of distortions and a run on the bank's international reserves that dropped to a new low in the last twelve months.

 The official exchange rate in banks and foreign money houses traded at 7.96 and 8.01 Pesos for the dollar which is the rate the Argentine government seems to be targeting.

According to market analysts trading remains steady at a low level with an abundant supply of dollars from grain exporters, oil and mining companies, which the central bank took advantage to absorb.

”You must take into account that we have a few holidays ahead, (Good Friday and a long weekend) so many corporations would rather have liquidity in Pesos given the high interest rates offered by banks”, said a market analyst. Furthermore dollars for imports at the official exchange rate remain extremely difficult to obtain.

But despite the big purchase, central bank reserves only climbed 9 million dollars to 27.759 billion dollars since a significant fuel bill had to be paid and the price of gold dropped, according to bank sources.

However the blue or parallel dollar on Tuesday climbed twelve Argentine cents to 10.40 Pesos following on Monday's ten cents drop. But a big influx of tourists from neighboring countries with stronger currencies, Chile, Brazil, Uruguay and Peru is also expected to help feed the local blue market.