Argentina’s central bank dumped $678 million on Friday and $1.1 billion across three sessions to defend the peso after it breached the government’s IMF-agreed trading band, underscoring that confident messaging hasn’t solved structural cash-flow and FX pressures.
The mechanics are now driving the narrative: since April, the peso has floated within a moving band negotiated with the IMF, with authorities intervening near the limits. This past week, the currency pierced the upper bound (1,474.50 per US$), forcing heavier sales as the informal rate toppled past 1,500.
While gross reserves hover around $39.3 billion, estimates of immediately usable net reserves are roughly $6 billion, a thin cover if daily sales persist anywhere near Friday’s pace.
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President Javier Milei said negotiations for US support are “very advanced,” and he is slated to meet President Donald Trump on Tuesday in the US as bonds and equities wobble and risk premiums widen.
Analysts warn that without swift balance-of-payments funding, Argentina may have to let the FX rate float beyond the current band or re-peg “at a much much lower level.”
The politics are amplifying the macro. A local election setback intensified the selloff and forced earlier-than-expected intervention at the band’s top, complicating the administration’s pre-midterm message that the program is on track.
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