MercoPress. South Atlantic News Agency

Argentina: Dollar soars despite Central Bank and US Treasury interventions

The “blue” dollar went up AR$25 from the previous day

The Argentine financial market saw significant intervention by both the Argentine Central Bank (BCRA) and the US Treasury on Tuesday to prevent the wholesale dollar from piercing the ceiling of its official exchange band of AR$1,491. The BCRA sold US$45.5 million in reserves to cap the price.

Market sources also reported that the US Treasury actively supplied dollars at $1,490.50 (just below the ceiling), adding a “double wall” of state-origin supply to the market. Despite the heavy intervention, the currency closed at AR$1,490.50.

The BCRA's sales brought its total intervention since the last local elections to US$1.155 billion —a move that further complicates the government's ability to meet its net reserve accumulation target set with the International Monetary Fund (IMF).

Analysts estimate that the net reserves (excluding IMF funds) are in a negative range, matching the position inherited by the current government.

Demand for dollars remains strong ahead of the upcoming midterm election, driven by the widespread market expectation that a change in the exchange rate scheme (implying a new devaluation/increase) will occur after Oct. 26.

This bearish sentiment is confirmed by the futures market, where the dollar future for October (expiring five days after the election) closed at AR$1,500, already above the official band ceiling. The dollar-linked segment also showed a high appetite for coverage.

The intervention occurred on the same day that US Treasury Secretary Scott Bessent confirmed the signing of a US$20 billion currency swap agreement.

Meanwhile, the “blue” dollar (a euphemism for “black market”) skyrocketed to AR$1,530, an AR$25 increase from the previous day. According to the BCRA, the average retail dollar sold at AR$1,513.04. The gap with the official rate stood at 2.8%. Other quotations were even higher, the gap with the official dollar reaching 7.4%. The so-called “tourist” dollar for purchases abroad with credit cards closed at AR$1,969.50.