The Central Bank sold dollars in late July for the first time in three months to prevent the peso from weakening too quickly, amid electoral nervousness and high inflation.
The bank sold US$70 million on July 27, the most recent date for which there is data on its website. PR Corredores de Cambio SC, a local stock brokerage, estimates that during the entire last week of July the bank sold US$310 million.
Argentina's Central Bank has a so-called “sliding peg” for its official exchange rate, by which it aims for gradual depreciation. The official rate has weakened more than 13 percent so far this year, while the unofficial “parallel” rate has depreciated even faster.
Argentina suffers from annual inflation of approximately 50 percent, high unemployment and uncertainty surrounds the upcoming midterm elections in November. Local investors have stepped up dollar purchases on unofficial markets to hedge against currency volatility and depreciation.
Seasonal dollar sales from crop exporters are expected to begin to decline this month, which could reduce the supply of dollars in the market and increase pressure on the peso.
The government is likely to respond by introducing measures to curb imports, said Federico Furiase, director of Anker Latin America, a local consultancy.
Argentina's foreign exchange reserves fell US$529 million, or 1.2 percent, last week to US$42.6 billion. Net reserves, which exclude the bank's foreign currency liabilities, amount to US$6.8 billion, according to data from Anker Latin America.