The Argentine weight was under pressure again on Tuesday (30), forcing the government to intervene to contain the devaluation a few days after one.
The currency has dropped more than 6% on the day – the largest low intradia since September 8 – before the government has been selling dollars in the spot market. In closing, it retreated 1.4%, to 1,380.0 pesos per dollar. It is unclear about Javier Milei’s administration negotiated. The Central Bank did not comment and the Ministry of Economy did not respond to requests for information.
The sequence of two falls marks a sudden reversal to the coin, which had risen more than 10% after US Treasury Secretary Scott Bessent announced a $ 20 billion package. A temporary reduction in export taxes also brought $ 7 billion in a few days, supporting the rally, while the government resumed part of the suspended capital controls in April. None of this was enough to avoid the resumption of devaluation this week.
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“If the government needs to sell one day like today, when there is a strong offer, it is natural that the market interprets negatively,” said Santiago Resico, an economist at the Broker One618.
Milei management took advantage of last week’s brief relief to buy dollars and reinforce reserves, but is difficult to contain increasing demand for US currency. The movement is fueled by doubts about the political support of the president on the eve of the legislative elections of office in October, especially after the significant defeat in the local vote of Buenos Aires in September, and for the lack of clarity on future currency policy.
The absence of details about the US package also weighs on assets. The government has announced that Milei, who returned from a US trip last week, will meet again with President Donald Trump on October 14 at the White House.
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Argentine dollar titles expired by 2035 retreated more than 1.8 penny on Tuesday for about 53 cents per dollar, among the worst emerging performances. The papers accumulate four followed falls, the longest sequence in two months.
Investors also follow with concern the expansion of the difference between the official and parallel exchange, at the highest level since April, a reflection of the pressure created by government restrictions on demand for dollars.
US support has brought some relief, but “does not solve the imbalances or the currency trend,” said Alejandro Cuadrado, BBVA’s exchange rate in New York. “The medium-term trend will be high and there will be a lot of post-election attention to dynamics and next steps, as this regime is seen as temporary.”
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Earlier, in a TV interview – the first since the US Treasury announcement – Milei gave the assets temporary by offering more details about the deal with the US. The president said he will keep the exchange line with China even while negotiating a financial rescue package with Washington. It also stated that Argentina has guaranteed financing until the end of next year and signaled changes in the cabinet after the October 26 vote.
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