Argentina Defends AR$1,500 Peso Level With US$145 Million Sale as Rates Climb
Updated
Updated · Buenos Aires Herald · Aug 11
Argentina Defends AR$1,500 Peso Level With US$145 Million Sale as Rates Climb
3 articles · Updated · Buenos Aires Herald · Aug 11
Summary
AR$1,500 has become the government’s apparent red line: the Treasury sold about US$145 million on July 28 and the central bank slowed dollar purchases to keep the wholesale peso-dollar rate from breaking higher.
US$21.2 million was the BCRA’s average daily dollar buying over the last five days, Max Capital estimated, the lowest of the year as officials tried to curb volatility and limit exchange-rate-driven inflation.
AR$4.5 billion in peso debt comes up for rollover on Wednesday, sharpening the tradeoff flagged by brokers: let peso yields rise to support the currency or ease rates and risk more demand for dollars.
29% was July’s peso interest rate, up from about 22% after starting the year near 35%, a move analysts say helps contain FX pressure but tightens financial conditions, slows recovery and squeezes private credit.
16 months before Milei seeks reelection, the intervention revives a familiar Argentine election-year dilemma: using lower rates to spur growth versus holding the dollar steady as an inflation anchor.