Argentina Is Going Broke to Stall a Full-On Currency Collapse

May 12, 2023

(Bloomberg) — Argentina’s fight to prevent its problematic currency from a total meltdown is leaving the central bank, by some estimates, broke. Without easy-to-spend cash on hand, questions are swirling about how much longer the government can continue to defend the peso from an all-out collapse. At risk is a currency devaluation that stands to fan 104% inflation and exacerbate high levels of social unrest ahead of October’s presidential elections. Story continuesArgentina has been flying through its dollar reserves as it tries to stop a slide in the peso’s parallel-market exchange rate, which has replaced the government’s official currency rate amid draconian capital controls. In just the past week, the central bank sold about $470 million to support the currency in parallel markets, said Fernando Marull, an economist at Buenos Aires-based consultancy FMyA.