Argentine bonds climbed for only the second time in six sessions on Thursday, while the peso strengthened for a second day ahead of crucial midterm elections this weekend.
Sovereign notes due in 2035 gained one cent to trade at 56.2 cents on the dollar, reversing the decline of the day before. The currency rose as much as 0.7 percent to close at 1,479 per dollar.
Both JPMorgan Chase & Co and Citigroup Inc were active in Argentina’s spot market Wednesday as the US attempts to head off a currency crisis for its ally Javier Milei before the elections. Traders estimate the US Treasury sold between US$400 million and US$500 million, its biggest intervention so far.
No official figures have been released and it’s not clear who is buying on Thursday.
Wednesday’s intervention snapped a losing streak that saw the peso come within cents of breaching its trading band as Argentines sought shelter in hard currency ahead of the vote. That also prompted the Central Bank to step in to prop it up for the first time in about a month.
That battery of support from local and US authorities has halted the slide in the peso, but failed to dispel concern it will be devalued after the election. That’s why many Argentines continue to buy dollars as soon as they have spare cash.
In a further attempt to prevent pesos flooding into the market, undermining the exchange rage, the Central Bank offered a swap on Wednesday of the shortest dollar-linked notes, which are maturing at the end of October, for longer-term securities, according to people with direct knowledge of the matter.
The US also agreed to increase its quota on beef imports from Argentina on Wednesday to boost the South American nation’s export revenue.
related news
by Philip Sanders, Bloomberg
Comments