"Donald Trump's announcement of economic aid for his ally Javier Milei includes a $20 billion currency swap, a line of credit through private banks worth another $20 billion, and the repeated intervention of the United States Treasury in the Argentine foreign exchange market. But none of this, including the multiple measures taken by the South American country's government, has managed to stabilize the financial market five days before Argentina holds midterm elections."
"The peso fell again against the dollar on Tuesday, and the U.S. currency reached the maximum expected under the current floating band scheme: it finally closed at 1,490.5 pesos per wholesale dollar. Since April, when Milei lifted restrictions on foreign currency trading the so-called cepo the local currency has devalued by nearly 25%. The wholesale dollar exchange rate at 1,490.50 pesos represented an increase of 15.50 pesos since the previous day."
"The Central Bank of Argentina (BCRA) had to intervene by selling $45.5 million to keep the price below the upper floating range, currently at 1,491 pesos. The BCRA had not sold any of its meager dollar reserves since mid-September, when it sold $1.1 billion in just three days, a drain that was stopped with the first of the successive announcements of the U.S. bailout."
Argentina faces deepening economic instability as demand for U.S. dollars surges and the peso continues to depreciate. U.S. President Donald Trump announced aid including a $20 billion currency swap, a $20 billion private-bank line of credit, and repeated U.S. Treasury interventions in the Argentine foreign exchange market. The peso reached the upper limit of the floating band, closing at 1,490.5 pesos per wholesale dollar, and has devalued nearly 25% since April after lifting currency controls. Market participants expect the government to modify key economic variables after midterm elections, prompting record dollar purchases. The Central Bank sold $45.5 million to defend the band.
Read at english.elpais.com
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