On Thursday, the market was surprised by the emergence of the US Treasury, which for the first time went out to buy pesos in the MLC. The operation occurred in the middle of Caputo’s trip to Washington and as part of the rescue that would include a swap for US$20,000 million.
Last Thursday he surprised the city that the “private offer” that broke out with force and It took pressure off the dollar in the Free Exchange Market (MLC) had behind him, neither more nor less, US Treasury. Through the Santander BankWashington went out to “buy pesos” for the first time in its historywithin the framework of Luis Caputo’s trip to Washington to finalize the rescue that contemplates a currency swap for US$20,000 millionand in the run-up to meeting between Javier Milei and Donald Trump.
But this situation, so atypical, left more doubts that certainties in the city. The first is what was the amount of intervention in the market. Some believe that the volume was in the order of US$24 million, according to what Ámbito was able to collect from various operators in the city. Others risked higher numbers. “The estimates go from US$100 million to higher figuresbut we will have to wait for the monthly reports from the US Exchange Stabilization Fund to have a more precise picture, since the daily reports from the US Treasury do not allow us to visualize the figure,” they revealed from Max Capital.
From PPIMeanwhile, they used the calculation of the gross reserves of the Central Bank (BCRA) to estimate the figure. As detailed, on Thursday the BCRA’s international assets barely fell by US$10 million, from US$42,066 million to US$42,056 million. However, the declines in gold and yuan prices should have generated a much larger reduction (around $213 million), “which implies an unexplained increase of about US$203 million. Will these dollars be part of the US Treasury’s selling flow?”they asked themselves from this stock broker.
It should be noted that, since 1996, The US intervened directly in another country’s currency market on only three occasions. In June 1998, Washington, together with the Bank of Japan, bought yen to support the currency in the face of its sharp fall. Two years later, in September 2000, in coordination with the European Central Bank, the northern giant bought euros in a joint intervention to stabilize the euro. And finally, in March 2011, after the devastating earthquake in Japan, in a coordinated intervention by the G7 sold yen to stop its excessive appreciation.
One-time intervention?
In dialogue with Scopethe financial analyst Christian Butlersaid that the intervention did not occur through a line of credit to participate in the exchange market, and exemplified, “it is not that they tell you you have US$5,000 million to stabilize the currency.” “This has been a specific and specific operation to generate a change in market expectations in the context of speculation that the band regime was not sustainable”he said and added that “The details will come about the rescue: what the swap will be like, when, and how it can be activated.”
For its part, Andrés Reschini of F2 Financial Solutionsopined that, in terms of intervention, “none of that is clear.” “For now the US government is playing with the strategy of supporting ‘whatever it takes’ but without too many details. CI think the issue will be clearer after the announcement made by Milei – Trump and for now the market is trying to orient itself with the signals we have so far which, in any case, point to unprecedented support given the strategic importance that the US has given to Argentina,” he clarified.
In turn, Eric Paniaguapartner of Dekadrak Venture Capital Consultinghe said that precisely “the idea that it is an intervention without precision is correct” because “we are playing with expectations.” “It’s always about something that can leave room for market interpretation and also ambiguity. If everything were specific and clear, you also expose yourself to the market having a negative reaction.either because the news is not what was expected or because the band is beginning to be tested,” he revealed and said that “I think it is a correct move, as long as it is as free of interpretation as possible.”
Luis Caputo: “They are willing to do anything”
In a television interview, the Minister of Economy, Luis Caputoprovided details of his trip to Washington and spoke about the US Treasury’s intervention in the MLC. The official explained that from the North American country they are “willing to continue buying pesos in the free exchange market, in the financial market, in futures, and to intervene in the bond market. “They are willing to do anything,” he declared.
Caputo also analyzed that the US Treasury “You do not decide to buy pesos thinking that it is a bad investment,” and gave as an example the professional past of the secretary, Scott Bessent, who, in the private sphere, “dedicated himself to evaluating and arbitrating currencies, he is a specialist in that.” The official also confirmed that the exchange scheme “remains the same” and ruled out a convertibility or a dollarization of the economy.
Source: Ambito
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