Bessent says US purchased pesos once more, foreign money slips

(Reuters) -The U.S. Treasury purchased Argentine pesos within the spot and “Blue Chip Swap” markets on Thursday and it continues to observe all markets, Treasury Secretary Scott Bessent mentioned on Friday.

“Treasury is monitoring all markets, and we now have the capability to behave with flexibility and with pressure to stabilize Argentina,” he mentioned in a submit on X.

It was the primary announcement of participation within the “blue-chip” market, after Bessent beforehand spoke of shopping for pesos within the spot market. The pledged U.S. assist additionally features a $20 billion swap with the Argentine central financial institution and the workings of a $20 billion facility to put money into the South American nation’s sovereign debt.

“We expect the assist from the U.S. Treasury helps stabilize markets,” mentioned Nigel Chalk, deputy director of the Western Hemisphere Division on the Worldwide Financial Fund in a press briefing.

“IMF workers have spent many hours and have been very deeply engaged with each Argentina and the U.S. Treasury by way of this course of,” he added.

He didn’t reply a query on whether or not the fund would reasonably see the peso, which trades in a band, float freely.

The official peso weakened 3.4% on Friday to 1,450 per greenback, not removed from the file low shut of 1,474.50 hit earlier than Bessent first introduced the U.S. backing.

Peso one-month nondeliverable forwards priced the foreign money at 1,446, after rising as excessive as 1,541 earlier this month. Three-month forwards see the peso close to 1,690 per greenback, based on LSEG information.

The U.S. Treasury has not disclosed how a lot it has spent buying pesos or whether or not it’ll do it on a schedule.

(Reporting by Susan Heavey in Washington, Maiya Keidan in Toronto and Rodrigo Campos in New York; Enhancing by Doina Chiacu and Matthew Lewis)