MercoPress. South Atlantic News Agency

Argentina clinging to floating US dollar, says Caputo

Caputo also denied a devaluation after the Oct. 26 midterms

Argentina's Economy Minister, Luis Toto Caputo, confirmed that the Government of President Javier Milei has ruled out dollarization and will maintain the current exchange rate band system, with a floating US dollar.

“What we are looking for is a monetary and exchange mechanism that will allow us to grow as soon as possible,” he insisted in a TV interview.

Caputo ratified a bilateral agreement with the United States, including a US$20 billion swap and operations to purchase Argentine bonds and currency/pesos.

The US support, backed by Donald Trump's administration, aims to “contain pressure on the dollar” and consolidate financial stability, especially after the upcoming October 26 midterm elections.

The US will continue to buy pesos on the free, financial, and future-dollar markets, supporting Argentina's current exchange scheme.

Caputo strongly rejected claims that the White House was imposing political conditions, calling the support “the most important news,” as it signifies the world's greatest power backing Argentina's economic path.

He also praised Milei's efforts, stating the US views Argentina as its main ally in the region. “The president invested a lot of time in this relationship. The United States views the region with interest and considers Argentina its main ally. It is important for them to show the world that their allies are doing well,” he said.

Additionally, the minister clarified that the agreement with the US does not imply the cancellation of the swap agreement with China, despite earlier statements by US Treasury Secretary Scott Bessent suggesting a commitment by Milei's government to “remove China from Argentina.”

Regarding opposition criticism that the US agreement risked national sovereignty, calling such claims “nonsense.”

Caputo also denied a devaluation after the elections, reaffirming the continuity of the exchange rate band system. He acknowledged the government's internal challenge of rebuilding trust with provincial governors following a breakdown in the relationship, admitting it was a mistake not to have been more involved in politics.

He anticipated that there would “likely be an announcement on Tuesday” during the meeting between Presidents Milei and Trump at the White House.