Confirmed: the BCRA is intervening in the exchange rate.

[FrankPintor]

Oh Frank....yes it is a free market. The country is trying to roll-over debt issues....and it can't sell enough of the new paper without increasing the paid interest rate. It all gets flimsier and flimsier......poor country....poor peso.

So the interest rate can't come down, making the "carry-trade" @carride references safer and even more lucrative? How much could I get between now and October?

 

[carride]

So the interest rate can't come down, making the "carry-trade" @carride references safer and even more lucrative? How much could I get between now and October?

The wink-wink of all the news about this over the past year, is not be the person holding the pesos at the time when dollar devaluates. Costing you more than your converted pesos + earned interest pesos to buy back your original dollars. Will it before or after the election? This week is certainly testing that limit, right?

What some said last week. Of course all this news is aimed at the institutional investor:

"as you get closer to the ceiling, the incentive to carry becomes stronger because the investor has less risk , and that helps sustain the exchange rate."

If the exchange rate reaches $1.446, which is approximately the current ceiling, then the investor can sell their dollars, invest in the current positive rate, and make risk-free profits, knowing that the price will continue to rise by 1% per month.

Dólar vs “carry trade”: para el mercado habrá un mayor incentivo por la tasa cerca del techo de la banda

Uno de los economistas más escuchados en la city consideró que era necesaria la suba del tipo de cambio para revertir la apreciación, aunque sostuvo que el límite superior de la banda "es creíble".

www-ambito-com.translate.goog

 

[GabrielT]

The wink-wink of all the news about this over the past year, is not be the person holding the pesos at the time when dollar devaluates. Costing you more than your converted pesos + earned interest pesos to buy back your original dollars. Will it before or after the election? This week is certainly testing that limit, right?

What some said last week. Of course all this news is aimed at the institutional investor:

Dólar vs “carry trade”: para el mercado habrá un mayor incentivo por la tasa cerca del techo de la banda

Uno de los economistas más escuchados en la city consideró que era necesaria la suba del tipo de cambio para revertir la apreciación, aunque sostuvo que el límite superior de la banda "es creíble".

www-ambito-com.translate.goog

To be clear there’s no “risk free” investment here. The risk remains that the dollar could continue rising even above the so-called ceiling.

 

[carride]

To be clear there’s no “risk free” investment here. The risk remains that the dollar could continue rising even above the so-called ceiling.

Obviously. The news link is there for anyone to read it all, outside of the one quote that I pasted. And exactly what I wrote in same post with the news link.

 

[Che1990]

For the Libertarian government, the exchange rate is because of Villarruel and the risk of the Kukas (nothing to do with their heavy intervention and not complying with the IMF funds of course)

Pretty desperate too, to blame someone who has nothing to do with the government and is completed isolated, and to blame the opposition who are totally fragmented with little chance of gaining ground in the mid-terms.

I think that both Caputo and Milei coming out and blaming others means it won’t go back down.

https://www.iprofesional.com/politica/434258-milei-apunto-contra-villarruel-dijo-que-busco-desestabilizar-con-una-corrida-cambiaria

Luis Caputo atribuyó la suba del dólar al “riesgo kuka” y dijo que el acuerdo con el FMI será bien recibido por el mercado

El ministro de Economía dijo que ante la incertidumbre electoral “algunos decidieron cubrirse”; adelantó que el acuerdo con el Fondo cambia el esquema de acumulación de reservas

www.lanacion.com.ar

 

[IamWaldo]

WU updated to 1356 seems fair.

 

[ArgentinaVet]

To be clear there’s no “risk free” investment here. The risk remains that the dollar could continue rising even above the so-called ceiling.

The agro sector has about $9.5 billion USD in exportable product sitting on the sidelines waiting for a significant enough devaluation to liquidate their holdings. This probably puts a ceiling on how far the currency will fall in the short term (between now and end of year). The lower export taxes combined with an FX rate in the 1450-1500 range will probably be enough for the farmers to play ball.

 

[ArgentinaVet]

Dólar caliente: después de la salida del cepo, se fueron US$ 12.000 millones por ahorro y turismo

Es la mayor salida de dólares por ese concepto en 22 añosSon datos del BCRA de entre abril y junio de 2025La demanda casi que duplicó el saldo de la balanza comercial de bienes

www.clarin.com

 

[FrankPintor]

Can you believe this?

Con el salto de julio, el dólar llegó al nivel que proponía el FMI

Pese a la postura del Gobierno, el organismo había advertido por la apreciación cambiaria en 2025

www.lanacion.com.ar

How much did Milei and his band of clowns spend to unsuccessfully defend an exchange rate that devalued to that actually recommended by the IMF?

Sold Blue Dollars at 1290 Pesos this morning.

 

[LuckyLuke]

Tread carefully with the carry trade. I read recently that literally no big players are buying peso instruments without hedging against dollar devaluation at the same time. It's a combination of two instruments, one peso denominated combined with a dollar contract should it drop below the break even rate to exit the contract. The combination of these two are called "synthetics". If the dollar devalues below the earned interest of the peso instrument, they are guaranteed an exit at the break even point. In other words, these carry trade investors are losing nothing. The difference between the cost of the dollar contract and the gain on the peso instrument is their "real interest gain" and it's far more modest than some 30-50% gain that are being advertised. This is why the IMF talks about raising the BCRA rate to ensure investors get a "real interest" while also maintaining a fiscal balance for interest payouts. Too low a real rate and investors run to the dollar.