New York (Reuters)-Argentine financial assets were strong on Monday, with the stock traded in the US rising more than 10%, international dollar titles rising more than 6 cents and the weight recovering after Washington said “all options are on the table” to support the Argentine government.
US Treasury Secretary Scott Bessent said swap lines, direct currency purchases and public debt purchases called US dollars could be used to support Argentina, which he labeled as an “important US systemic ally in Latin America.” Bessent added that Argentina President Javier Milei and US President Donald Trump will meet on Tuesday.
Earlier, the Argentine government has announced that it will temporarily remove export taxes on all grains, as it will be valid until the end of October, a deadline that will encompass an important election of mandate on October 26.
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Argentine markets have fallen dramatically in recent weeks, with international titles falling more than 20% in the year and the weight pressing against the weakest limit of a band established months ago, as allegations of corruption within President Javier Milei circle and a greater defeat in a local election in Buenos Aires triggered concerns about Milei’s ability to reshape the economy.
“Argentina’s assets were desperately needing a circuit breaker – and they just received one,” said Alejo Czerwonko, a Cio for emerging markets in the UBS Americas. “Bessent’s intervention has a huge weight in this fragile conjuncture. She offers the government Malei a critical window to reorient herself before the October elections.”
A favorable political result in the October election would contribute a lot to contain the anxiety of investors caused by the vote in Buenos Aires province earlier this month, Czerwonko added.
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An Argentine stock index traded on US stock exchanges jumped almost 12% and the 2046 title rose 6.7 cents to 53.85 cents, according to Marketaxess data. The weight was 2%strengthened at 1,446 per dollar after the Argentine Central Bank burned last week more than $ 1 billion in reserves to defend it.
Despite the recovery of the Eurobonus, the income was still relatively high, between 16% and 26%, in all salaries. Investors were still focused on Milei’s arrangement to change course, which was tested on both the streets and in the markets.
“Depending on scope and nature, US financial support, combined with export tax measures announced this morning, could help Milei more effectively manage the current currency structure until the 26th,” said Kathryn Exum, a sovereign research codirer of Gramercy Funds Management.
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This could reduce the rate of burning precious reserves by the authorities, which, at current levels, is unsustainable, Exum added.
“The government’s disposition and ability to quickly adjust the policy after October will determine the trajectory of securities prices and the need for a passive management exercise or market access by 2026.”
