https://www.batimes.com.ar/news/economy/argentina-is-going-broke-to-stall-a-full-on-currency-collapse.phtml Argentina’s fight to prevent its problematic ____ from a total ____ is leaving the Central Bank, by some estimates, ____. The nation has already spent all of its ____ international reserves, plus another estimated US$1 billion, according to Buenos Aires-based consulting firm 1816 Economía & Estrategia — ____ as the nation ____ with a historic drought and ____ recession. Without easy-to-spend cash on hand, questions are swirling about how much longer the government can continue to defend the peso from an ____ collapse. At risk is a currency devaluation that stands to ____ 104 percent inflation and exacerbate high levels of social unrest ahead of October’s presidential elections. “Fewer reserves leads to more pressure on the exchange rate, which in turn leads to more pressure on inflation,” said Fernando Losada, a managing director at Oppenheimer & Co. “I see no possible scenario under which inflation goes below three digits this year.” Argentina has ____ to build and keep international reserves at ____ levels for decades, running through cash piles to combat rising prices and ____ obligations on ____ bonds. The nation now technically has less than US$34 billion in total foreign reserves, but the majority is ____ in less-liquid assets — such as gold, ____ with China and the Bank of International Settlements and the dollars Argentines have in their ____. That’s a problem for a country in need of ____ cash. Argentina’s ____ in foreign currency already exceed total reserves by about US$1 billion — the worst such ratio since the nation was wracked by economic crisis in the early 2000s, according to the 1816 firm’s report last week. Argentina has been flying through its dollar reserves as it tries to stop a ____ in the peso’s parallel-market exchange rate, which has replaced the government’s official ____ amid ____ capital controls. In just the past week, the Central Bank sold about US$470 million to support the currency in parallel markets, said Fernando Marull, an economist at Buenos Aires-based consultancy FMyA. It’s been difficult to measure the success of the government’s intervention. The unofficial peso lost about 13 percent ____ the US dollar last month, and is down 33 percent so far this year, by far the biggest decline in key emerging markets. President Alberto Fernández has, in the past, attempted to ____ reserves by forcing dollars earned from exports to flow into Central Bank accounts and by accepting International Monetary Fund cash ____. But those measures are largely ____. And Fernández — who has already withdrawn his candidacy for re-election — has no guarantees that talks to rework a US$44-billion programme with the IMF will result in sped-up loan ____ to help ____ the situation. A ____ for Argentina’s Central Bank said the market’s calculation of ____ reserves doesn’t properly reflect its balance ____ because it fails to ____ other sources of financing, such as a currency swap line with China. Officials have opted for other emergency measures in the meantime, including tapping the China swap to finance US$1.8 billion of imports from the country. It’s also working with Brazil to ____ bilateral trade with credit lines in reais, allowing it to ____ the dollar. For Argentines, the uncertainty is palpable. ____ by the Central Bank’s decision to ____ access to dollar savings during the 2001 economic crisis, many Argentines are already ____ cash from their savings. They ____ over US$1 billion of US dollar deposits from the banking system from late March to the end of April. There are also few signs that reserves can be ____ any time soon. The worst drought of the century has all but removed any possibility of an ____ of cash from agricultural exports before the elections. “The risk of having liquid reserves in negative territory is that the Central Bank may not have the dollars needed to meet an even stronger ____ of foreign-exchange deposits,” said Juan Sola, an economist at BancTrust & Co in Buenos Aires.

ECONOMICS Argentina is going broke to stall a full-on currency collapse 10 May 2023 Buenos Aires Times

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