The US Treasury bought more Argentine pesos Friday than it had in any other session, traders estimated, as the currency continued to lose value despite American support.
Traders estimated that Secretary Scott Bessent’s Treasury sold more than US$200 million during the trading session Friday, with roughly half coming in the final 10 minutes, according to people with direct knowledge. That approximate figure wasn’t seen in prior sessions, at least in the official spot market, the people added, asking not to be named discussing specific transactions.
The US Treasury Department’s press office didn’t respond to multiple requests for comment Friday on the scale of its peso purchases. Bessent disclosed earlier that the US had also bought pesos Thursday in Argentina’s parallel exchange rate known by investors as the “blue-chip swap.”
“Treasury is monitoring all markets, and we have the capacity to act with flexibility and with force to stabilise Argentina,” Bessent wrote on X Friday morning.
The intensified effort underscores Washington’s determination to stabilise markets ahead of Argentina’s midterm elections on October 26. President Javier Milei’s party is trying to boost its representation in Congress where it only holds about 15 percent of seats. In addition to buying pesos, Bessent is also offering a US$20-billion currency swap line, and organising private lending of the same amount with banks and sovereign wealth funds.
In a rare move, the Trump administration last week began buying the peso, which is down about 30 percent so far this year, in a bid to stabilise markets, yet Argentines continue to buy dollars for fear of a post-election currency devaluation.
The peso’s slide accelerated Friday, tumbling as much as 5.2 percent intraday to 1,475 per dollar before closing around 1,450, while the parallel rate weakened as much as 3.7 percent. Bonds spiked briefly before giving back gains.
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by Ignacio Olivera Doll, Bloomberg
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