With only three trading days left until the legislative elections, Argentina's foreign exchange market is trading actively and the demand for the US dollar is strong. Official institutions continue to intervene in the market to curb the upward trend.
On that day, the wholesale exchange rate of the US dollar closed at 1490.50 pesos per US dollar, with a daily increase of 15.50 pesos (about 1.1%). The trading volume reached 718.4 million US dollars, an increase of about 320 million US dollars from the previous trading day. The exchange rate almost reached the upper limit of the current forex range at the close of trading -1491.07 pesos, with a difference of only 57 cents. Market analysis suggests that this uptrend was suppressed by institutional selling, possibly from the US Treasury Department or the Argentine central bank.
In the interbank market, the selling price of Banco Naci ó n in US dollars rose by 20 pesos (1.3%) to close at 1515 pesos, equaling the historical high set on September 19th. According to central bank data, the average retail price of US dollars for financial institutions is 1518.74 pesos for selling and 1467.77 pesos for buying. At the same time, parallel exchange rates also fluctuated significantly, with the black market dollar (d ó lar blue) rising to 1545 pesos.
In the capital market, parallel exchange rates implied by asset prices have also broken records. MEP USD was reported at 1582 pesos, up 2.9%; The "cash settled" US dollar (contado con liquidaci ó n) was reported at 1601 pesos, up 2.7%.
Economist Gustavo Ber pointed out that the recent intervention of the US Treasury Department can only temporarily slow down the trend of peso depreciation, and the uncertainty of the market's political and economic prospects still drives safe haven dollar buying. He believes that the election results will determine whether a new balance will emerge in the foreign exchange market. "If the political situation stabilizes, private demand may slow down, and official foreign exchange purchases will also resume. Otherwise, the current foreign exchange system will be difficult to maintain in the long run
Gustavo Quintana, a trader at PR Corredores de Cambio, stated that the wholesale exchange rate had risen by 40 pesos in the first two days of this week, in sharp contrast to the 60 peso decline in the same period last week.
Ignacio Morales, Chief Investment Officer of Wise Capital, analyzed that "despite the government announcing a $20 billion currency swap agreement with the United States and launching a debt buyback program, market volatility has not eased as a result. Investors are focused on whether the US Treasury will intervene again to prevent the exchange rate from breaking through the upper limit of the range and causing the loss of central bank reserves
The Romano Group's report suggests that the government is attempting to regain political trust nationwide by stabilizing the financial situation and garnering support from the United States; Vatnet Financial Research emphasizes that in the future, Argentina must ensure foreign exchange inflows to fulfill its basic obligations, including foreign debt interest.
US Treasury Secretary Scott Bessent confirmed that the US believes the current exchange rate range is appropriate and will continue to intervene in official and financial markets.
Pedro Siaba Serrate, an analyst at Portfolio Personal Inversiones, pointed out that compared to the pre election period in Buenos Aires Province, the current market sentiment is more cautious and pessimistic. "The demand for the US dollar is mainly due to pre election risk aversion, and the market is waiting for the election results to determine the next direction
The institution added that although the US Arab currency swap agreement has boosted market confidence, it will not directly change the central bank's net reserve level, which is currently estimated to be around $1.54 billion.
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