Argentina’s central bank will begin selling US dollars on the country’s parallel currency markets in an effort to combat inflation and freeze the money supply. About this informs Reuters.
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Economy Minister Luis Caputo announced the new strategy on Saturday on the X social network, saying it would “help deepen the disinflation process.”
According to Caputo, starting Monday, when the Central Bank of Argentina issues pesos to buy US dollars in the official foreign exchange market, the bank will effectively balance Argentina’s monetary base by selling an equivalent amount of dollars in the parallel foreign exchange market “CCL”.
“Not a single peso is printed in Argentina 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.
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The strategy, developed by the government of President Javier Millay, aims to stabilize the money supply, reduce inflation and narrow the gap between the official rate of the Argentine peso and the parallel rate traded in financial markets.
Since the beginning of the year, the parallel markets of the South American country have seen a drop in the peso rate, which for years differed sharply from the official rate due to strict exchange control.
At the close of trading on Friday, the official exchange rate was 919.5 pesos to the dollar and the so-called “CCL” was 1,416.2 pesos to the dollar. Meanwhile, the widely used black market “blue” rate fell to an all-time low of 1,500 pesos to the dollar on Friday.
We will remind
“Minfin” wrote that the President of Argentina, Javier Millay, has decided not to raise taxes on fuel and prices for utility services once morest the background of the difficult economic situation in the country.
