Nearing Zero: Argentine FX Reserves Drain Puts Central Bank in Corner

Gross reserves have fallen to some US$39 billion from near US$43 billion a year ago and a US$77 billion recent peak in April 2019, while net reserves - subtracting central bank liabilities not in pesos - are much lower depending on the source.

RIO DE JANEIRO, BRAZIL -  Argentina’s net currency reserves are at or near zero, according to analysts and investors, forcing the central bank into a tough choice: double down on controls that have failed to stem the currency’s decline or allow the peso to devalue further.

Downward pressure on the peso has been steady all year and intensified of late as the government continues to print its way out of a budget deficit, while inflation rising to near 40% and a lack of confidence in economic and monetary policies further weigh on the currency.

“If the population does not . . .

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