Bessent says US bought pesos again, currency slips

Audio By Carbonatix

Enlarge

(Reuters) -The U.S. Treasury bought Argentine pesos in the spot and “Blue Chip Swap” markets on Thursday and it continues to monitor all markets, Treasury Secretary Scott Bessent said on Friday.

“Treasury is monitoring all markets, and we have the capacity to act with flexibility and with force to stabilize Argentina,” he said in a post on X.

It was the first announcement of participation in the “blue-chip” market, after Bessent previously spoke of buying pesos in the spot market. The pledged U.S. support also includes a $20 billion swap with the Argentine central bank and the workings of a $20 billion facility to invest in the South American country’s sovereign debt.

“We think the support from the U.S. Treasury is helping stabilize markets,” said Nigel Chalk, deputy director of the Western Hemisphere Department at the International Monetary Fund in a press briefing.

“IMF staff have spent many hours and have been very deeply engaged with both Argentina and the U.S. Treasury through this process,” he added.

He did not answer a question on whether the fund would rather see the peso, which trades in a band, float freely.

The official peso weakened 3.4% on Friday to 1,450 per dollar, not far from the record low close of 1,474.50 hit before Bessent first announced the U.S. backing.

Peso one-month nondeliverable forwards priced the currency at 1,446, after rising as high as 1,541 earlier this month. Three-month forwards see the peso near 1,690 per dollar, according to LSEG data.

The U.S. Treasury has not disclosed how much it has spent purchasing pesos or whether it will do it on a schedule.

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