Argentina is beginning to receive a flood of hard currency that analysts see around US$30 billion over the next six months, giving President Javier Milei his best chance to build up international reserves.<\/p>\n
The Central Bank\u2019s depleted cash stockpile is a perennial concern for investors and the International Monetary Fund. The lack of reserves has kept Argentine yields high and pushed out Milei\u2019s return to international capital markets. A rush of dollars could begin to resolve some of those concerns.\u00a0<\/p>\n
Surging oil production and a strong crop harvest are driving exports and underpinning the Argentine peso\u2019s newfound strength against the dollar even as inflation picks up. Milei\u2019s policymakers are seizing the moment as Central Bank Governor Santiago Bausili starts picking up the pace of dollar purchases to accumulate an extra US$8 billion of reserves \u2013 a new condition of Argentina\u2019s IMF programme.\u00a0<\/p>\n
Milei has long predicted the wave of dollars to come into Argentina. He\u2019s also semi-jokingly warned Bausili that he shouldn\u2019t rebuild reserves too fast for fear that it could pump pesos, and therefore inflation, into the economy.\u00a0<\/p>\n
\u201cSantiago, dollars are going to be coming out of your ears,\u201d Milei said<\/a> at JPMorgan\u2019s headquarters in New York in March, with Bausili in the crowd. \u201cBe careful with the purchases\u201d Milei added, \u201cmay they not go to inflation.\u201d \u200b<\/p>\n Trucks carrying grain in Santa Fe Province. Argentina\u2019s trade surplus hit a two-year high in March, driven by strong agricultural and energy exports.<\/p>\n Whether Milei fully takes advantage of the moment is less clear. His government, as well as previous ones, has missed the IMF target for reserve accumulation, and needed a waiver to get board approval in Washington.\u00a0<\/p>\n