Investors betting that Argentina will have another sharp currency devaluation are going to lose, central bank chief Alejandro Vanoli said on Tuesday, assuring the market that there is a firm policy to keep the peso stable. Since Vanoli became head of the bank in early October, Argentine authorities have cracked down on capital flight and black-market dollar trading after a sharp slump in the peso and a drain on foreign currency reserves this year.
"In these 45 days it has become clear that anyone dreaming about a run on the currency, or thinking that they can destabilise the exchange rate, will not be able to do it," Vanoli told a financial conference sponsored by the central bank in the capital city of Buenos Aires. The black-market peso ended Monday at 13.43 per dollar, 0.7 percent weaker for the session, after another day of volatile trading. The official peso rate was little changed on Monday or in early Tuesday trade at 8.515.
President Cristina Fernandez began restricting access to dollars through legal channels in 2011, forcing many Argentines to use the black market and legal loopholes to purchase greenbacks. A devaluation in January and a debt default in July battered confidence in the peso and triggered an outflow of capital. The peso sank to a record low of 15.95 in late September, prompting the latest crackdown under Vanoli.
The bank has tried to reduce demand for US currency by further limiting the amount available to importers. On Monday the bank received the second instalment of a currency swap from China worth $500 million for a total of $1.3 billion over the past three weeks. The central bank issued a statement showing its reserves at $28.785 billion on Monday from $28.279 billion on Friday. At the start of the year, reserves stood at $30.60 billion.
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