Argentina sells dollars to curb peso slide as new rules kick in

Argentina’s Treasury sold dollars Friday, people familiar with the matter said, looking to limit the decline of the peso on the first day that new rules allowing for larger swings kicked in.

Traders estimated sales of US$150 million to US$200 million, asking not to be named because the information is private. 

The Treasury didn’t immediately respond to a request for comment. Argentina’s Central Bank declined to comment.

The peso weakened 1.4 percent to 1,475 per dollar on Friday, the initial trading day of the year that marked the debut of Argentina’s new foreign-exchange trading band regime. 

Under the new framework, announced in December, the peso’s trading bands will expand at the same rate as monthly inflation instead of being capped at one percent per month.

Argentina is just days away from having to make a January 9 payment on its dollar bonds. Investors are confident the South American nation will meet its obligations – which include principal and interest – with outstanding notes maturing between 2030 and 2038 trading above 75 cents on the dollar, according to data compiled by Bloomberg.