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The Argentine peso settled around 1,100 to the US dollar early Wednesday. Its difference from the unofficial “blue dollar” rate shrunk to 6–7%. Now, traders in Buenos Aires are starting to believe that President Javier Milei can make Argentina’s currency stronger. Both the International Monetary Fund (IMF) and World Bank estimated a 5% growth in Javier Milei’s country. However, the economy is surpassing these expectations. Traders believe that the peso will trade at 1,000 pesos to the dollar. All this began with Milei’s most recent brave move to lift the “cepo” restrictions, which meant “trap” or “shackles” in Spanish and had kept people from accessing US dollars for more than 20 years. The currency controls were put in place in 2003 to try to stop Argentina’s inflation from getting out of hand.  Investors thought that the move would cause the peso’s value to drop. But it didn’t. As part of Argentina’s new $20 billion deal with the IMF, the peso can now freely move between 1,000 and 1,400 per dollar. Fears of inflation are currently off the table. Goldman Sachs says that the peso has exceeded expectations The blue rate went up to 1,165–1,185 pesos overnight after briefly falling to 1,355 last week. This happened because demand for real dollars rose again because of ongoing economic instability. In Monday’s trading, the peso rose 3.7% to 1,103. This is close to where it was before currency controls were lifted on April 14. The central bank’s funds rose to $44 billion thanks to money from exports and a $12 billion IMF loan. Due to President Javier Milei’s “zero deficit” strategy and a small amount of money in circulation, inflation fell from 300% per year in early 2024 to 56%. As exporters sell dollars, J.P. Morgan said that gaps in the foreign exchange…

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Filed under: News - @ April 23, 2025 4:24 pm