Overview

• The U.S. Treasury intervened directly in Argentina’s FX market by purchasing pesos via Santander, Citi and JPMorgan, an unusual step for Washington.
• A currency swap framework of about US$20 billion with the BCRA was announced, though timing, tranche structure and any conditions have not been disclosed.
• Financial quotes retreated after the move: the MEP and CCL fell, sovereign bonds climbed as much as 9% and local equities rose up to 25%, while the official dollar ended near 1,450 pesos.
• The Federal Reserve’s record shows such U.S. FX operations are rare, with only three interventions since 1996 prior to this action.
• U.S. and Argentine officials framed the support as targeted relief for acute illiquidity ahead of the election, not a standing defense of the exchange-rate bands or a substitute for domestic policy choices.