The dollar took a break after the rally of the last few days, with the wholesaler losing 0.7% this session to $1,364, while the retailer fell five pesos to $1,375.
This closes a hectic week, which saw the exchange rate climb 6.5%, the sharpest jump since the currency controls were lifted. With lower supply from the countryside and sustained demand, the market went through the first month since Minister Luis Caputo challenged them with the phrase,"If you think the dollar is cheap, buy a champion. Don't miss out." The response was to bring the dollar to just 6% of the bank's exchange rate ceiling, currently at $1,450.
The economic team's strategy of raising rates in pesos to redirect investments going to the dollar to the local currency was not enough, despite the fact that in the tender last Tuesday they validated rates of up to 65%.
The dollar only calmed down this Friday, the day after the International Monetary Fund announced its approval of the first revision of the agreement, which will trigger the disbursement of US$2 billion next Monday.
In addition, two other measures managed to stem the escalation at the end of the week. The first was that, starting August 1, the reserve requirement for money market investment funds that fund digital wallets will be raised. This seeks to remove pesos from the market and prevent them from flowing into the dollar.
"We are increasing reserve requirements so that there are fewer pesos and to reduce volatility," said Central Bank President Santiago Bausili yesterday.
The other measure was a new intervention in the dollar futures market. According to the consulting firm 1816, the Central Bank is increasing its presence in the futures market, as its"short position went from US$1.9 billion to around US$4.8 billion."
Meanwhile, the Treasury continued buying foreign currency. Minister Luis Caputo acknowledged that they have been buying US$70 million per day, and according to him, this also contributed to the rise of the dollar."We're bringing a lot of supply to the market," Caputo said during the Neura streaming event. President Javier Milei also participated, accusing the banks and Vice President Victoria Villarruel of being behind the jump in the exchange rate.
At the close of the week, the MEP fell 0.2% to $1,357, and the cash with liquidity rose 0.6% to $1,366. The blue dollar held at $1,335 and remains the cheapest on the market.
Economist Gustavo Ber explained that"after the recent rebound, the wholesale dollar is trying to catch a break, even amid intraday fluctuations. Although it should self-regulate as it approaches the band's ceiling, based on a rebound in carry appetite, investors are monitoring the tools and strategies applied by the authorities, as well as ensuring that there is no transfer to prices, given that disinflation is a political and economic pillar."
Argentine bonds and stocks fell this Friday. The Merval index lost 1.7%. On the central panel, the biggest drop was Supervielle, down 3.9%.
Among the ADRs listed on Wall Street, almost all ended in the red, led by Globant, which fell 5.3%, followed by the banks BBVA, Macro, Galicia and Supervielle, with losses of more than 3%.
Among bonds issued in dollars under foreign law, the decline averaged 0.5%. The largest decline was for the Global bond, which fell 0.8%.
The poor performance of Argentine assets this time was more closely linked to the external situation than to local factors. Thus, the weak labor market data in the United States appears to have had a greater influence than the International Monetary Fund's approval of the agreement with Argentina. On Wall Street, the Dow Jones Industrial Average fell 1.3% and the Nasdaq, 2%.
