© Reuters. FILE PHOTO: Argentine one hundred peso bills are displayed in this picture illustration taken September 3, 2019. REUTERS/Agustin Marcarian/Illustration
By Walter Bianchi
BUENOS AIRES (Reuters) - Argentina's peso currency sank in widely used parallel markets on Thursday, hitting a record low against the U.S. dollar as concerns grew about the Latin American country's economy, with 104% inflation, reserves dwindling and drought hitting exports.
The black market peso, one of several unofficial rates that have flourished as tight capital controls have limited access to official forex markets, weakened almost 4% to 438 per dollar, roughly double the official rate of 218 pesos.
The blue-chip swap or CCL rate was at 433 pesos per dollar and the MEP was at 421.3 per dollar, traders said.
Argentina, the world's top exporter of processed soy and a major supplier of corn, beef and wheat, is battling to keep its economy stable as a historic drought crimps foreign currency income, fans local prices and drains central bank reserves.
A government effort to spur soy exports with a preferential exchange rate for producers has floundered due to low reserves of the oilseed linked to the drought and worries about the depreciating currency leading farmers to hold onto stock.
That has further pressured already weak central bank reserves, forcing it to sell dollars.
"The scant income of agriculture has forced the central bank (BCRA) to intervene as it had been doing prior to the launch of the 'soybean' dollar," said local consultancy Portfolio Personal Inversiones in a note.
"The stock (of BCRA reserves) is so small that it cannot withstand negative flows of this magnitude for many more days. According to our estimates, net reserves closed yesterday at $679 million, the lowest since March 2022," it added.
Argentina is headed for crunch elections in October, with the center-left Peronist ruling coalition under pressure at the polls and facing the prospect of defeat, adding to uncertainty.
