Economy Minister Luis Caputo told investors in New York that Argentina plans to buy back sovereign bonds and begin accumulating international reserves even while the peso is trading within its fluctuation band, according to people with direct knowledge of the matter.
During a meeting with about 40 investors organized by JPMorgan Chase & Co. on Friday, Caputo said that President Javier Milei has no intention of letting the Argentine currency float, but will keep it trading within the established bands, according to sources who asked not to be identified when discussing a private meeting.
However, Caputo indicated that he could consider accelerating the pace of exchange rate band adjustments to 1.5% monthly, depending on inflation and demand for pesos, according to two sources. Currently, the upper and lower limits of the fluctuation range are adjusted 1% monthly, allowing for a gradual depreciation of the peso.
Caputo hopes to unveil the full plan — which includes a schedule for reserve accumulation, debt buybacks and a debt bond for education — within a period of 30 days, according to one of the sources, referring to his statements.
The press offices of JPMorgan and the Ministry of Economy of Argentina They did not respond to requests for comment after business hours Friday.
Since Milei’s party won the Argentine midterm elections two weeks ago, many investors They have argued that this is the time for the president to rethink his political program. Pacific Investment Management Co. urged the libertarian president to allow free fluctuation of the peso.
Reserve accumulation
Although Argentine officials have denied any intention to change the exchange rate regime, Caputo said he would modify rules to allow the government to buy dollars when the peso is trading within the band and market liquidity is strong.
Caputo did not specify when dollar purchases would begin, But he said he expects the currency to continue appreciating as demand for pesos grows, according to sources.
Since Argentina signed a $20 billion deal Caputo urges Argentine bankers to increase reserves and buy back bonds with the International Monetary Fund in April, the central bank has struggled to build up planned international reserves. Instead, it has been forced to sell dollars to prop up the peso amid pre-election volatility.
