Argentina’s Dollar Firefight To Hold The Peso Ahead Of Elections

For the sixth straight session, Argentina’s Treasury has been selling dollars to prop up the peso, a politically fraught defense just weeks before midterm elections on October 26.

Traders estimate between $250 million and $330 million was sold on Tuesday alone, bringing the six-day total to at least $1.5 billion. Market desks say the Treasury’s readily deployable deposits may be down to roughly $700 million, a figure officials do not publish.

The Central Bank still has reserves it can use, but it is bound by an IMF-agreed “band” that permits intervention mainly if the exchange rate breaks predefined limits.

The bank reportedly sold about $1.1 billion last month when the peso pressed the ceiling. More recently, the government has leaned on Treasury cash to keep the rate inside the corridor without triggering a formal breach.

On paper, the policy is working: the official wholesale rate has been held near 1,429 pesos per dollar. On the street, though, the dollar trades above 1,500 pesos, and that gap is widening.

Tighter capital rules—such as a 90-day ban on reselling dollars bought at the official rate—and heavier use of FX futures have not cooled demand.

Argentina Faces Peso Pressure Ahead of Vote

Futures prices imply an annual devaluation near 60 percent over the next year, a market signal that the band might need to shift after the vote. Behind the story is a simple dilemma. Argentina wants calm before the ballot and credibility after it.

Burning Treasury dollars today helps avoid a visible break of the band, but it also drains cash the government may need for imports and debt.

A $500 million market payment falls due in November, and dollar bonds slipped this week, with 2035 notes around 56 cents on the dollar. Officials are seeking help in Washington, but the size and timing of any package remain unclear.

If fresh dollars don’t arrive soon, the choices narrow: move the band, tighten controls further, or accept a steeper step-down in the peso—with consequences for prices at home and confidence abroad.