Argentine central bank takes steps to stop currency tumble

Source: Xinhua| 2018-06-19 12:56:36|Editor: Liangyu
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BUENOS AIRES, June 18 (Xinhua) -- Argentina's central bank BCRA on Monday announced a series of measures to stop the peso's tumble against the U.S. dollar, after the national currency hit a record low last week.

Under its new President Luis Caputo, the bank announced it will inject 400 million U.S. dollars in cash into the financial market between Monday and Tuesday.

In a statement the bank said the amount is separate from the 7.5 billion U.S. dollars to be made available starting Wednesday, when the International Monetary Fund (IMF) is scheduled to disburse the first tranche of a 50-billion-U.S.-dollar loan to the Argentine government to help shore up its economy.

"This operation will be carried out independently," the BCRA said.

The bank also announced a package of measures, including raising reserve requirements for banks by 5 percentage points.

The other measures call for reducing the level of dollar holdings at banks from 10 percent to 5 percent; strengthening treasury bills by offering investors more flexible conditions; and creating a new mechanism for selling dollars during times of exchange rate volatility.

The new system involves a central bank auction that will last just 15 minutes. Participants will be able to put in up to three bids each, for "a minimum amount of one million U.S. dollars each and in increments of one million U.S. dollars," the bank said.

The measures are the first to be announced since Caputo took over the agency following the resignation last week of Federico Sturzenegger.

The remaining half of the IMF's first 15-billion-U.S.-dollar disbursement will be used to beef up the country's international reserves, Argentina's Treasury Minister Nicolas Dujovne said Friday.

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