Dollar Rollercoaster: US Support Sends Argentinian Peso Soaring!
Argentine Peso Surges After US Shows Support
In a dramatic turn of events, the Argentine peso experienced a significant rebound following a strong show of financial support from the United States. This comes after weeks of economic turbulence and uncertainty surrounding the country's economic plan and exchange rate system. The news sent shockwaves through financial markets, triggering a wave of optimism among investors.
Secretary of the Treasury Scott Bessent's statement that the Trump administration is prepared to "do what is necessary to support Argentina" proved to be the catalyst for the peso's resurgence. Immediately after Bessent's announcement, Argentine stocks and bonds rallied, while the dollar's price plummeted, effectively eliminating the exchange rate gap that had widened to nearly 7% just days prior.
Market Reaction and Central Bank's Role
The currency market witnessed a trading volume of $494 million USD, remarkably without any intervention from the Central Bank. This is a stark contrast to the previous three trading sessions, where the Central Bank had engaged in negative interventions totaling $1.11 billion USD.
The wholesale dollar rate closed at $1,408 for sale, marking a substantial decrease of 67 pesos or 4.5% compared to the previous Friday. According to the Central Bank, this placed the official exchange rate nearly 70 pesos below the upper limit of the exchange rate band, which currently stands at $1,476.79. Gustavo Quintana, an agent at PR Currency Brokers, noted that a daily drop of this magnitude had not been seen since May 7th.
Impact on Reserves and Retail Market
Despite the positive market sentiment, the Central Bank's international reserves decreased by $141 million USD, settling at $39.118 billion USD. The retail dollar rate also experienced a decline of 85 pesos or 5.6%, reaching $1,430 for sale at Banco Nación. The dollar had previously reached a nominal high of 1,515 pesos on Friday. The Central Bank reported that the average dollar price for sale in financial institutions was $1,438.30 (down $85.45 or 5.6%), while the buying price averaged $1,383.34.
Blue Dollar and Government Measures
The unofficial "blue dollar" rate also decreased by 45 pesos or 3%, trading at $1,475 for sale. In related news, the Argentine government has temporarily eliminated export taxes on beef and poultry until October 31st, following the 2025 legislative elections. A decree published in the Official Gazette also eliminated export taxes on all grains until the same date.