Argentina appears to have devised a formula to control demand for the U.S. dollar, successfully transitioning from a currency-controlled economy to a free-floating band system without triggering explosive devaluation levels.

The move, part of President Milei’s campaign promises, encountered a market that did not turn to buy dollars outright and is instead cautiously optimistic about the future of the Argentine peso. During Monday, the dollar exchange rate fell even further, closing at nearly 1,100 pesos per dollar, registering a 4% intraday drop.

Most notably, dollar futures dropped close to 6%, meaning the expectation is for further falls, even taking the exchange rate close to the central bank intervention spot: 1,000 pesos per dollar.

If the rate hits that number, the central bank will purchase dollars, withdrawing liquidity from the market. Nonetheless, if demand rises, the bank is also equipped to inject liquidity, having received a $20 billion credit facility from the International Monetary Fund (IMF).

Read more: Argentina Scores $20 Billion Key IMF Credit Facility, Terminates Currency Controls

Economy Minister Luis Caputo celebrated this result, rejecting the statements of critics who assumed this move would result in a massive devaluation of the peso. On social media, Caputo stated:

We should expect a torrent of colleagues and journalists apologizing for telling people that we had devalued, but it’s probably not going to happen.

“Once again, we did what we said we were going to do, and what we said was going to happen happened,” Caputo concluded.

Nonetheless, the situation might harm the government’s strategy soon, as exporters might avoid injecting dollars into the market due to the low exchange rate. Additionally, the current dollar weakness in international markets might be at play here, as it recently fell against its peers, pushed by diverse factors.

Read more: Dollar Reined in After First Currency Control Free Week in Argentina

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。