(Adds background on reserves)
By Jorge Otaola and Walter Bianchi
BUENOS AIRES, April 28 (Reuters) - Argentina's central bank
bought $630 million of dollars on the local currency market on
Tuesday in one of its largest-ever purchases, a source told
Reuters, a move that will bolster the country's precariously low
hard currency reserves.
Some $500 million of the dollars purchased were proceeds
from last week's $1.5 billion auction of bonds by state energy
company YPF, the source added.
Largely shut out from/of global credit markets since a
massive debt default in 2002, Argentina imposed currency
controls three years ago to stem a hemorrhaging of hard currency
and the depletion of its reserves.
Since then, all entries of dollars into Latin America's
third-largest economy have had to pass through the central bank,
which closely regulates the currency market, restricting how
much importers and savers may buy.
Those restrictions have fueled a rampant black market as
Argentines look for channels to buy dollars to shield their
savings against inflation and hampered imports.
Yet the restrictions have proven insufficient to protect
Argentina's reserves, which fell to dangerously low levels last
year, setting the country on track to a balance of payments
crisis.
As a result the government has set about taking unorthodox
measures, such as currency swaps with China, in order to shore
up reserves and tide this government over until the end of its
term. Presidential elections are set for October and Cristina
Fernandez cannot run for a third term.
Markets widely expect Argentina's next government to
implement a more sustainable solution to its financing problems
by resolving its long-standing battle with investors over unpaid
debt in order to be able to reaccess international credit
markets. At the same time, they see it lifting currency
restrictions.
Argentina's central bank reserves on Monday closed at
$32.679 billion, the highest level since November 2013, thanks
in part to the unorthodox measures but also to the proceeds from
Argentina's $1.4 billion bond sale last week.
The central bank's purchase of dollars on Tuesday will
further boost reserves which economists say nonetheless remain
low in view of large debt payments due this year and the
country's high energy bill.
(Reporting by Jorge Otaola and Walter Bianchi; Writing by Sarah
Marsh; Editing by Jeffrey Benkoe and Ted Botha)