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Argentina foreign reserves hit $40 bln for first time since April 2013
October 20, 2016 / 10:30 PM / a year ago

Argentina foreign reserves hit $40 bln for first time since April 2013

BUENOS AIRES, Oct 20 (Reuters) - Argentina’s foreign currency reserves rose above $40 billion for the first time in 3-1/2 years on Thursday, a milestone the country’s central bank chief said was a sign of growing investor confidence in the country.

Foreign reserves rose to $40.6 billion, Argentina’s central bank said, their first time above the $40 billion mark since April 2013. That marked a 63 percent rise from $24.9 billion on Dec. 10, 2015, the date of President Mauricio Macri’s inauguration, according to central bank data.

“I have insisted that the level of reserves is not very relevant. But the fact that they’ve risen above $40 billion says something about growing confidence in the country,” Federico Sturzenegger, the president of the central bank, said on Twitter.

Former leftist President Cristina Fernandez depleted reserves to prop up the exchange rate, finance imports and service debt, policies the Macri administration has rolled back.

With the country unable to borrow on international markets after a record 2002 default, dwindling reserves during the Fernandez administration raised the specter of a balance-of-payments crisis. Those concerns have subsided since Argentina returned to international debt markets in April.

Macri ended currency controls and let the peso float shortly after taking office, and settled a legal dispute with U.S. hedge funds, paving the way for the country to return to global capital markets with its $16.5 billion sovereign debt sale earlier this year.

He has also pledged to trim the country’s fiscal deficit, which ballooned under Fernandez because of generous spending on social programs. But cuts to the deficit in the government’s 2017 budget were more modest than previously announced.

Reporting by Luc Cohen; Editing by Peter Cooney

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