For the city it provides short-term relief, but doubts remain about the post-26-O scheme

In this sense, he mentioned that “in a market that began to discount growing tensionsan intervention of this scale has the capacity to re-anchor expectations, strengthen sovereign parities, both of bonds in foreign and local currency, and moderate exchange pressures, at least in the immediate electoral horizon“.

Although Ritondale acknowledged that “its concrete implementation remains to be defined, the signal that Washington sends is unequivocal: there is a will to sustain the Argentine stabilization process with resources of unusual magnitude and speed“.

Similarly, the economist Luis Secco He argued that it was “a very powerful signal” for the markets, so “it should compress the gap, lower risk and rally assets.” Besides, “avoid a run in the previous election and limits damage after the adverse legislative week and the growing noise about corruption.

For its part, Econviews highlighted that “the swap would reinforce accounting reserves, providing an additional ‘cushion’ of dollars to face an eventual run“. In addition, they highlighted that “there could be additional funds for direct intervention in the exchange market (which were already used this Thursday), added to the possibility that the Treasury buys Argentine bonds. “A very positive combo for Argentina.”

Let’s go bands?

At another point in his analysis, Secco highlighted Bessent’s sayings that the flotation band “remains adequate to fulfill its purpose”. In his opinion, that definition of the Trumpist official “rules out, at least in the very short term, regime changes (non-dollarization) and shields the defense of the current scheme“.

For their part, the analysts of Econviews They also echoed the statements of the Secretary of the Treasury, but gave it a different interpretation: “Something that caught attention is that Bessent endorsed the exchange bands, although it leaves open the possibility that the ceiling could be different“.

Meanwhile, the consultant LCG They argued that “since there will be a closer audit by the government and the IMF (audit that will be both economic and political, supervising the “coalition building” of local government), “It is still probable that after the elections the end of the exchange bands will occur.”

The objective, they explained, would be “go to a more flexible scheme and according to the external balance and the accumulation of reservessomething that the IMF has been asking for since the agreement signed in April.”

Doubts ahead for the dollar

Secco said that, in any case, the scenario that opens up to the government from now on is not without risks, since “does not guarantee reversal of the political climate” because, among other reasons, “does not ensure a recovery of voting intention” but “prevents further deterioration of the ruling party’s electoral chances”.

On an economic level, the analyst mentioned that the possibility that the “initial success leads to persisting in the defense of a misaligned exchange rate”in a situation similar to what happened at the beginning of the year with the IMF. “It burns scarce ammunition and leaves the adjustment for later,” he summarized.

For its part, since Econviews They highlighted that “what is missing now is the fine print, which will show what Argentina will have to do in return.” And they mentioned that “one unknown is what the role of the IMF may be, if it has any.” Furthermore, they mentioned that “The real test remains how to strengthen external accounts.”

And they added: “The support of the United States can give it air and time, but does not resolve underlying imbalances. This new bailout offers another opportunity to recalibrate the program, rethink the exchange rate scheme and how to accumulate reserves. If used well, it can mark a turning point; if it goes to waste it will probably be the last lifesaver“.