What happened this week with Argentina is unprecedented. USA announced something it had never done before in its history: it bought Argentine pesos. Yes, as you read. And now?
The Secretary of the Treasury, Scott Bessent, confirmed that the government of trump sold dollars and bought pesos to sustain exchange rate stability. And, furthermore, he closed a swap of foreign exchange US$20,000 millions with Central Bank.
In recent history, the US Treasury it had only intervened directly twice: in 1998, to support the yen; in 2000, to support the euro; and now, in 2025, with the Argentine peso. This historic decision It is a sign of enormous political, economic and geopolitical support for the government of Milei.
The effect was immediate. In minutes, the Argentine bonds They flew, the dollar collapsed and the stocks exploded. He Merval rose more than 12% on the day and ADRs They had one of the best wheels in recent years.
Let’s look at the stock’s performance for the week:
The market, which had been asking for concrete signals for weeks, finally had its “show me the money”. The reaction was so strong that the exchange gap practically disappeared and the country risk sank.
Let’s look at the behavior of AL30, which has already exceeded the levels prior to the Buenos Aires elections, after rising 38% from the lows:
al30 in usd
trump decided to make Milei a central ally in Latin America. In the immediate term, this injects confidence, relieves pressure on the exchange rate (who is going to dare to play against it knowing that the American treasury is behind it?) and gives air to the reserves. But it also has a deeper effect: it changes the narrative.
The Treasury buys pesos because it considers them to be undervalued. Scott Bessent confirmed it on television. In other words, he sees that there is value. If also, as rumored, USA starts buying Argentine bonds, that can accelerate the fall in country risk and return Argentina to the credit market. Yeah Milei manages to maintain the fiscal surplus and consolidate stability, the circle can become virtuous: less risk, more credit, more investment, more growth.
Of course, this doesn’t solve everything. The economy remains fragile, activity is weak and inflation has not yet been fully resolved. But in a context where the market needed a change in tone, this announcement was a huge confidence boost. The feeling is that the country gained time and credibility.
Obviously, the most relevant will be the legislative elections of October 26. Because beyond Trump support or the oxygen that the US can provide, the great catalyst continues to be political.
The market is going to look if Milei manages to expand its power in Congress to accelerate reforms. If that happens, the scenario recovery could gain strength. If a bad result occurs, the situation could get complicated.
Meanwhile, the data of the week was very clear: Argentine assets had one of the best weeks in recent years.
It is a spectacular signal, isolated but powerful, that can mark the beginning of a new stage for local assets. There is still a long way to go: Argentina has to continue showing fiscal discipline, move forward with reforms and avoid political mistakes.
After a very hard year, this week’s signal was positive and everything suggests that there is a lot of upside in Argentine stocks and bonds from these levels.
As we look at Argentina, in Brazil and China Opportunities are also brewing. In this report I tell you the 8 actions that could take off before 2026. Click and download it for free: Investor Club.
Note: The material contained in this note should NOT be interpreted under any circumstances as investment advice or a recommendation to buy or sell a particular asset. This content is for educational purposes only and represents the opinion of the author only. In all cases it is advisable to seek advice from a professional before investing.
*CEO of Investor Club
Source: Ambito
