President Javier Milei’s government shifted course on Tuesday, announcing Treasury intervention in the currency market to slow the peso’s accelerated slide.
The move represents a break from the administration’s hands-off exchange rate policy. It comes just days before legislative elections in Buenos Aires Province – Argentina’s largest district and a Peronist stronghold.
The intervention also follows a scandal over alleged bribes implicating Presidential Chief-of-Staff Karina Milei, the head of state’s sister and closest confidant.
Heavy demand for dollars has driven the exchange rate close to the ceiling of the official band – 1,467 pesos per US dollar – the point at which the Central Bank is allowed to intervene.
The Milei administration’s policy of raising benchmark interest rates has not curbed the rush to offload pesos and seek refuge in the dollar amid a heightened climate of uncertainty, fuelled by the approach of the nationwide midterm elections on October 26.
The currency turbulence coincides with a judicial investigation into alleged corruption and the overpricing of medicines at the ANDIS national disability agency, a case in which Karina Milei has been implicated.
Exchange rate fluctuations remain a highly sensitive issue for Argentines looking to protect their savings through foreign currency. The government is determined to prevent a weakening peso from fuelling inflation.
Controlling inflation has been one of Milei's central goals since taking office. Consumer prices have risen 17.3 percent so far this year, compared with 87 percent over the same period in 2024.
Finance Secretary Pablo Quirno said in a post on the X social network that the Treasury’s intervention in the free exchange market is “contributing to its liquidity and normal functioning.”
After nearly reaching 1,400 pesos per dollar on Monday, the peso strengthened to 1,375 on Tuesday following the announcement, a gain of nearly one percent.
– TIMES/AFP
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