Argentina to Sell Dollars In Parallel FX Market, Caputo Says

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Argentina’s central bank will sell US dollars in the country’s parallel foreign exchange markets starting Monday, a move Economy Minister Luis Caputo called “a deepening of the monetary framework.”

Patrick Gillespie and Ignacio Olivera Doll --

Price increases on a monthly basis began to mildly accelerate in June for the first time since Milei took office Dec. 10, according to government figures released Friday. Annual inflation at 272% remains one of the highest in the world and well into crisis territory. “If the central bank purchases dollars in the official exchange market, the equivalent emission of pesos will be sterilized by the sale of equivalent dollars in the contado con liquidacion market,” Caputo wrote in a series of posts on X.

The steps could likely exacerbate ongoing market concerns that the government is letting the official exchange rate become too overvalued by maintaining strict currency controls. They would also further impede the central bank’s ability to accumulate foreign reserves needed to lift the controls at some point, and eventually repay $44 billion to the International Monetary Fund as well as return to international debt markets.

 

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Argentina to Sell Dollars In Parallel FX Market, Caputo Says(Bloomberg) -- Argentina’s central bank will sell US dollars in the country’s parallel foreign exchange markets starting Monday, a move Economy Minister Luis...
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