After two years of prioritising “a cheap dollar” as an anchor to show falling inflation figures, President Javier Milei’s government has yielded to pressure from Washington to strengthen Argentina’s international reserves.
The announcement of an update to the peso’s exchange-rate trading bands, indexing them to inflation as from January, confirms a pragmatic shift: Milei’s economic team is sacrificing the slowing of inflation in an attempt to improve Argentina’s credit profile and push down a country risk premium that, even after testing the Bonar 2029 bond, has struggled to drop below the 600 basis-point threshold.
The market’s more nuanc
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