The Minister Luis Caputo Think of green. Rather, green dollar.
The economy is going through a critical moment at the doors of the Legislative elections in the province of Buenos Aires. Political uncertainty, combined with pressure on the exchange rate, tests the government’s ability to maintain stability. An adverse result in the elections could unleash a greater demand for dollars, stressing the international reserves of the Central Bank of the Argentine Republic (BCRA), which are already found in negative terrain. In this context, the Executive has prepared An alternative plannot officially announced, but that is emerging as a pragmatic maneuver to guarantee liquidity in the Single and free market (Mulc).
This plan B focuses on the Reduction of the Net Global Position of Foreign Currency (PGNME) of the banksa measure for release dollars and contain volatility in a market under pressure. PGNME represents the net asset and liabilities in foreign currency that financial entities can maintain, including cash, term and other instruments linked to the exchange rate.
Recently, the BCRA reinforced controls on this position with measures like the Communication “A” 8311which limited the ability of banks to increase their currency holdings at the close of each month and established a daily compliance with the negative PGN from December 2025. These restrictions seek to avoid speculative movements that destabilize the MULC, while the increase in bank lace has reduced liquidity in pesos, limiting the demand for dollars by financial entities. However, these measures have generated criticism in the banking sector, which perceives a hardening of the rules in a context of high uncertainty.
Banks, the adjustment variable in the dollar world
He Government Plan Bdesigned as an emergency tool before a possible adverse post -election scenario, would imply a deepening of these restrictions. Further reduce the limits of the PGNME would force banks to disarm positions in dollars, either selling currencies in the Mulc or adjusting their dollarized asset portfolios. This would generate an immediate flow of dollars to the market, relieving the exchange pressure without massively resorting to the BCRA reserves. As he could know Scopethis measure was on the decision table just a few days ago, but Minister Luis Caputo preferred to wait and not continue to stress the relationship with the banks.
This was because the strategy entails significant risks. Forcing banks to part with their holdings in foreign currency could generate friction in the financial systemespecially if the entities interpret these measures as an abrupt change in the rules of the game, as they have already pointed out in the past.
This week, Treasury intensified its efforts to contain exchange volatilityintervening directly into the Mulc with significant sales of dollars. On Tuesday 2, coinciding with the announcement of a new intervention strategy, The Treasury sold US $ 200 millionalthough on Wednesday he partially reversed this dynamic. Yesterday, sales resumed with an injection of US $ 1550 million. These operations, led by the Secretary of Finance, Pablo QuirnoThey sought to stabilize the exchange rate, which closed at $ 1,365 after a rebound of financial and official dollars, while the blue dollar showed a slight decline.
However, the BCRA continued to lose reserves, evidencing the difficulty of sustaining the exchange balance in a context of electoral uncertainty. Despite these interventions, the market keeps a high guard. According to estimates, The Treasury initially had a fire power of US $ 1,800 million to intervene to the national elections. With recent operations, it is estimated that approximately US $ 1,600 million, a limited figure to face a possible exchange run, especially if $ 65 billion in fixed term deposits migrate to the dollar is subtracted, forcing the BCRA to intervene in The ceiling of the exchange band, currently at $ 1,482.
The financial front, increasingly complicated
The authorization of International Monetary Fund (IMF) for these sales, conditioned to the use of fiscal surplus resources, It reflects the delicate relationship between the government and the agency, which requires accumulating reservations to meet the goals of the US $ 20,000 million program agreed in April. The impact of Buenos Aires elections adds an additional layer of complexity. Surveys suggest that Peronism could get a blunt victory In the third electoral section, while the first section anticipates a more at odd contest. Although freedom is expected to advance (lla) capture a more significant portion of votes in the sections, Peronism could consolidate a greater support, strengthening its position in the face of national elections.
This scenario Keep marketswho see in the electoral result an signal about the government’s ability to sustain their economic agenda. Compared to 2023, when Peronism won the third section for 16 points, current projections indicate a lower, but sufficient gap to maintain pressure on the ruling party. The data is that, beyond the electoral, analysts begin to subtract weight from the elections as an exclusive determinant of economic dynamics.
The government faces structural challenges that transcend the result of the polls. The twin surpluses, which were a pillar of the management of Milei, show a future that is not promising: the financial surplus was not only lost, but in July, taking the interests that are capitalized, it would have given in deficit of $ 19 billion. On the other hand, the primary is at risk after the recent approval in the Senate of the emergency for disability, which invalidated the presidential veto. These fiscal pressures, combined with an estimated exchange delay between 20% and 30% in real terms, hinder the accumulation of reserves and generate doubts about the sustainability of the scheme of exchange bands, which allows the exchange rate to float between $ 1,000 and $ 1,400, with monthly adjustments of -1% and 1%, respectively.
Plan B, focused on the reduction of PGNME, is presented as a containment tool to gain time in front of a high volatility scenario. However, its effectiveness will depend on the magnitude of the adjustment, the reaction of the banking system and the ability of the BCRA to manage liquidity in a coordinated manner.
Source: Ambito
