Argentina's central bank will begin selling US dollars on the country's parallel foreign exchange markets in an attempt to combat inflation and freeze the money supply. This is reported by Reuters.
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Economy Minister Louis Caputo announced the new strategy on Saturday on the social network X, saying it will “contribute to the deepening of the disinflation process.”
According to Caputo, starting on Monday, when the Argentine Central Bank issues pesos to buy US dollars on the official foreign exchange market, the bank will effectively balance Argentina's monetary base by selling an equivalent amount of dollars on the parallel currency market “CCL”.
“In Argentina, not a single peso is printed anymore. This is historic news,” Caputo said in a radio interview.
Official data released on Friday showed that a five-month streak of slowing inflation ended in June, when monthly inflation was higher than in May.
Strategy. developed by the government of President Javier Miley, aims to stabilize the money supply, reduce inflation and reduce the gap between the official exchange rate of the Argentine peso and the parallel rate traded on financial markets.
Since the beginning of the year, parallel markets in the South American country have seen a decline in the peso exchange rate , which for years differed sharply from the official rate due to strict exchange controls.
By the close of trading on Friday, the official exchange rate was 919.5 pesos per dollar, and the so-called “CCL” was 1,416.2 pesos. for a dollar. Meanwhile, the “blue” rate widely used on the black market fell to a historical low of 1,500 pesos per dollar on Friday.
Recall
The “Ministry of Finance” wrote that Argentine President Javier Miley decided for now do not increase taxes on fuel and prices for utilities against the backdrop of a difficult economic situation in the country.