Overview
- Argentina’s central bank announced a bilateral stabilization swap with the U.S. Treasury for up to $20 billion, describing it as liquidity support that would be available if activated, with key terms yet to be detailed.
- Despite the announcement, the peso weakened: the wholesale rate closed near the top of its band around 1,490, the Banco Nación retail rate reached 1,495, and financial and parallel rates hovered around or above 1,550 and 1,500 respectively.
- Market participants reported recent U.S. Treasury interventions estimated near $400 million to buy pesos, which offered brief relief but did not reverse persistent dollar buying ahead of the October 26 elections.
- Pricing signals pointed to further depreciation risk after the vote, with banks citing year‑end official levels at or above 1,700 pesos and futures indicating roughly 1,650, reflecting doubts about the exchange‑rate band regime.
- The government said it began talks with JP Morgan on a sovereign debt buyback to lower financing costs, while broader context showed accelerated dollarization since capital controls were lifted, with private dollar deposits near $34.4 billion and tight domestic peso liquidity.