With a sliding exchange rate and yields on peso-denominated instruments moving between 2.5% and 2.7% monthly, the incentive to sell dollars, invest in Treasury bills or bonds, and repurchase currencies later becomes strong. However, carry trade was never a path of certainty: it is a bet that the balance will hold. This external push, even if not massive, can tilt prices in a market that moves on expectations and the delicate balance between supply and demand. But the same scenario that fuels carry trade also installs a risk that grows in silence: the 'space' the exchange rate has to rise without breaking rules. In concrete numbers, over the last month, the strategy has left estimated gains of between 6% and 8% in dollars for those who entered at the right time: selling dollars, capturing the peso rate, and re-dollarizing with a stable or falling exchange rate. In this context of apparent calm, high peso rates, and abundant dollar supply, a classic City strategy has returned to the center of the scene: carry trade, now more profitable in dollars but also more exposed to a short-term reversal. The dynamic has a simple yet delicate explanation. The wholesale dollar is located significantly below the ceiling of the floating band updated by the Central Bank, and according to market estimates, the distance is around 13% or even more, depending on the day of the upper limit calculation. In a world where the annual rate on U.S. Treasury debt is hovering around 4% nominal, that monthly dollar yield looks almost irresistible to many, even though the risk is of a different nature. In the City, they add a spice that explains the 'extra' bearish tone of recent rounds: the entry of dollars from abroad to set up carry positions. Translated into everyday language: the exchange rate could rebound strongly — for example, by 80 or 100 pesos — and still remain within the scheme, which would be enough to eat up a significant portion of the dollar yield of a short-term strategy. This distance was amplified by the way the bands have been adjusted since January: the ceiling and floor evolve monthly at the pace of inflation reported by INDEC with a lag, which accelerates the movement of limits when the CPI remains high. And when the market offers such high returns in so little time, it is also signaling — albeit in a low voice — that risk is always around the corner. An internal noise, an external shock, a misread political signal, or an inflationary surprise can overheat the market and force a rapid exchange rate adjustment. The Argentine foreign exchange market closed the last week with a data that caught the attention even among traders accustomed to volatility: the official wholesale dollar was again below $1,400 and can't find strength to take off, while financial dollars followed the movement and, in the case of MEP, narrowed the gap to almost null levels against the retail dollar. The most visible signal appears in the settlement with liquidation (contado con liquidación), the typical channel to enter and exit currencies through the stock market. The result is a growing gap between the current exchange rate and the ceiling, which reduces the 'coverage feeling' that some investors associate with operating near the upper limit. For now, many traders discount that exchange rate tranquility will continue for a few more weeks due to a combination of factors: moderate private demand, sustained supply of dollars, and the expectation that the seasonal inflow from the large grain harvest will strengthen dollar availability. In that case, what is today a 'dollar' yield can, from one day to the next, turn into an evaporated profit or even a loss. With the 'flat' dollar and still tempting rates, the strategy will continue to seduce. Even so, the weak point of carry is not mathematical, but one of confidence. In parallel, the official dollar remained calm or bearish. Private analysts link part of the recent CCL drop to fund flows arriving to take advantage of the local rate in a context of a quiet dollar and attractive yields. Buenos Aires-February 23, 2026-Total News Agency-TNA-.
