On Thursday, Argentine bonds witnessed an increase for the second time in the past six sessions, while the peso improved for a second consecutive day in anticipation of the crucial midterm elections that will take place this coming weekend. One cent was added to the value of sovereign notes that mature in 2035, and they are currently trading at 56.2 cents on the dollar. This is a reversal of the fall that occurred the day before. A maximum increase of 0.7 percent was seen in the value of the currency, which ultimately reached 1,479 per dollar.
In an effort to prevent a currency crisis for its ally Javier Milei in advance of the elections, the United States actively participated in the spot market of Argentina on Wednesday. JPMorgan Chase & Co. and Citigroup Inc. were both involved in the market. It is estimated by traders that the United States Treasury carried out sales with a total value ranging from $400 million to $500 million, which is the Treasury’s most significant action to date. In addition, the identities of those who made purchases on Thursday are still unknown, and there has been no formal disclosure of the statistics.
The intervention that took place on Wednesday put an end to a string of losses that had pushed the peso dangerously close to exceeding its trading band. This occurred when members of the Argentine population shifted to hard currency in preparation for the impending election. Additionally, as a result of this trend, the Central Bank decided to intervene in support for the first time in nearly one month. Despite the fact that the significant assistance from local and US authorities has effectively stemmed the depreciation of the peso, it has not removed concerns surrounding the possibility of a devaluation occurring after the election. This helps to explain why a sizeable portion of the Argentine population continues to carry out the practice of purchasing dollars whenever they have surplus funds.
In a further effort to prevent an influx of pesos into the market that could compromise the exchange rate, the Central Bank proposed on Wednesday a swap of the shortest dollar-linked notes, which are scheduled to mature at the end of October, for longer-term securities. This was reported by sources who are familiar with the situation. The United States of America has agreed to increase its quota on beef imports from Argentina beginning on Wednesday. This decision was made with the intention of increasing the amount of money that Argentina makes from its exports.