Peso posts sharpest weekly fall since Milei took office

[devilclam]

unless the elections bring something for him.. or the polls give any kind of indication that he might be closing the gap.. i am giving the peso little chance

I think splitting the local/national elections was a risky political maneuver, but it could have a big payout for Milei's opponents. With the peso taking on water (and LLA losses in recent memory), I would imagine that many voters will be taking that pessimism with them to the ballot box.

 

[Caribbean Cool]

If you parallel 1918-1920.....looking at the dates....the election.....the fact that a lot of people are pissed off....and a lot of businesses are closing (yes here in Canitas-Palermo-Recoleta), it is reasonable to think of peso 1800-2000 easily. Or much greater levels. This will have consequences for all of us.......good and bad. (this deteriation of the peso lately might be 'chicken feed'.)

And I must add that the inflation rate in the earlier period was aprox 50% compared to today's 150%...and that is a generous estimate. This is a very serious situation that the country is in.

 

[LuckyLuke]

IMO, Milei's doom was already set a month ago when he decided to veto all these laws. LLA has very little congressional seats to begin with and he pissed all over the PRO alliance that could have protected him.

Milei won the presidency because nobody wanted Massa. But that is not the same story of every diputado/senador who has to compete for their elections along much more moderate lines.

By Milei becoming the "austerity villain" he guaranteed a rebellion within congress, who were more than happy to feather their future election caps by overturning the "evil veto".

Milei can win a presidency against a handful of candidates, but he cannot with a room of hundreds of competing candidates with nothing but purse tightening violent rhetoric. That requires a lot more diplomacy that perhaps only Macri could have helped accomplish.

One of the really dark events to come out of the recent statistic was not that inflation was reducing insofar as producers found collapsing demand with each attempted price increase. The market ceiling was finally found and customers could no longer absorb anything more. Producers were left with the choice of reducing their profit margins and try to outride it before debt rollovers were due or to lay off staff and reduce production to stem the bleed. In addition to this pain, Milei's stranglehold on the pesos in circulation caused interest rates to spike. Producers already stuck with unproductive assembly lines and eroded profits had no viable way to roll over their debts. The combination is catastrophic.

Milei cannot continue this path. When the market sees the dollar reserves start dwindling from intervention it will only cause the value to spike further. He must let it float and focus instead on how to allow at least private producers to stay in business if he's going to cut all public spending projects. Paralyzing the debt/FX market will continue to destroy the investment engine he desperately needs to stabilize the country.

Rampant unemployment will only further breed a populist rebellion and we could well see a Peronist revival as a result.

 

[FrankPintor]

What's your take on how this will play out?

My crystal ball is fogged up, I can’t even see tomorrow. But under the current rules, Milei has no more firepower, he can’t effectively intervene to defend the Peso exchange rate.

So either he widens the currency band, say to 1600, lets the Peso float, maybe it will settle at 1600-1800, or brings back some sort of Cepo.

If he uses the loaned IMF cash to defend the Peso, he would have the firepower, at least for a time. It’s territory Caputo and Sturznegger are familiar with. Against the IMF rules, but there are apparently different rules for right wing governments.

It’s really quite amazing that Milei couldn’t even make it a few more weeks to October without everything falling apart. It shows how little he’s achieved. And how little he can achieve, with his stupid culture wars, insults, toadying to Trump and adoring Israel and Netanyahu, instead of governing the country. He’s destroyed relationships with people who could and probably would have helped him.

I don’t think he will finish his mandate, he has neither the competence nor the temperament needed to be president.

 

[RichardAlem]

This is why there is inflation in Argentina; despite assertions to the contrary by so-called experts who are reduced to having to rely upon Wikipedia, yet who do not understand causality. From Trading Economics:

"Money Supply M2 in Argentina averaged 3981657.27 ARS Million from 1990 until 2025, reaching an all time high of 80975305.60 ARS Million in June of 2025...."

 

[IamWaldo]

And today we see another 2.5% jump in the rate.. confidence is everything

 

[Ries]

And today we see another 2.5% jump in the rate.. confidence is everything

are you sure they didnt just print another 2.5% of the money supply? because I hear that printing is the source of all evil.

 

[IamWaldo]

i am not sure i understand your comment;

You relate it to supply; i relate it to confidence..
There was confidence in Milei.. and basically it vanished due scandals.. due elections.. due that the numbers are regressing..
Nothing is going in his favour at this moment.
Anyway:

 

[FrankPintor]

The BCRA burned another USD 379 million today, the Blue Dollar is now 1510 Pesos (selling rate), and I think we have a gap opening up between the official and blue rates again... it's deja vu all over again.

El Banco Central debió vender USD 379 millones en el mercado para frenar la presión sobre el dólar

El dólar mayorista sigue operando en el techo de la banda cambiaria a $1.474,50. En el Banco Nación, el minorista subió $10 y finalizó en $1.495. El blue saltó a $1.510

www.infobae.com

 

[Ries]

i am not sure i understand your comment;

You relate it to supply; i relate it to confidence..
There was confidence in Milei.. and basically it vanished due scandals.. due elections.. due that the numbers are regressing..
Nothing is going in his favour at this moment.
Anyway:

View attachment 10601

Its a Dad joke, son.