A severe drought is gripping the southern part of South America due to months of little rain and high temperatures.

Uruguay has been hit by its worst drought in 74 years. The country declared a state of emergency in the capital Montevideo and surrounding areas due to a water shortage earlier this week.

Two reservoirs supplying water to the areas have almost dried up. About 2 million people live in the capital. Some supplies include water from rivers.

The Uruguayan government says there is no health problem with the mixed water as sodium and chlorides are removed to make it safe for drinking. But many residents are rushing to buy bottled water.

Uruguayan President Luis Lacalle Pou stressed that the government will make utmost efforts to secure drinking water and build a new reservoir.

The drought is also taking a heavy toll on neighboring Argentina.

Crop yields of wheat and soybeans that support the country's economy have plunged.

The commodity shortages are accelerating the peso's depreciation. Inflation rose in May to an annual rate of 114 percent.