Argentina’s central bank auctioned a total of US$ 200 million of its reserves in two separate currency auctions on Tuesday after the peso hit new lows, the monetary authority said in a statement.
The Brazilian Real led losses in Latin America as lingering concerns over presidential elections overshadowed a largely positive environment for emerging market assets. The US dollar ended trading at 4.333 Reales.
The dollar stepped back from 13-1/2-month highs against other major currencies on Friday as talks next week between China and the United States offered some hope that the world’s two largest economies will find a way to head off a full-blown trade war.
Latin American stocks and currencies mostly fell on Monday as the trade dispute between the United States and other leading economies worsened, but central bank intervention kept the Brazilian real steady.
Argentina’s central bank moved on Wednesday to improve its debt profile by offering to swap some of its one-month Lebac securities for paper of longer duration, the bank said in a statement.
The Bank of England has backed off from raising interest rates as it slashed 2018 growth forecasts, but said the economy would bounce back from a weather-hit “soft patch”. Policymakers kept the prospect of rate hikes firmly on the cards, although it sparked confusion over when the next increase may come.
The dollar hovered near a four-month high on Tuesday, continuing to draw support from higher Treasury yields and upbeat prospects for the U.S. economy, leaving its major rivals such as the Euro struggling and other Latin American currencies including the Argentine peso down sharply.
The markets of China, Ukraine, Argentina, South Africa and Turkey are the most vulnerable among all developing countries in terms of financing needs, reserve adequacy, asset valuation, institutional quality and trade resilience, according to a review by the analysts of the Institute of International Finance (IIF).
Argentina’s central bank raised its benchmark interest rate by 300 basis points to 33.25% percent on Thursday, but the second steep rate increase in less than a week failed to stop the country’s peso currency from swooning to a record low. The local currency tumbled 7.83% to 23 per U.S. dollar. It had hit 21.2 to the greenback on Wednesday, the first trading day due to a holiday after the bank hiked the rate to 30.25% from 27.25% on Friday.
China is taking its first steps towards paying for imported crude oil in Yuan instead of the U.S. dollar, according to Reuters, a key development in Beijing's efforts to establish its currency internationally.