The Argentine government used the first disbursements of the $20 billion swap agreement to return funds to the United States that were employed in October to contain the exchange rate before the elections, injecting over $2.2 billion into the market. In New York, Economy Minister Luis Caputo presented the guidelines of the economic strategy for the coming months to investors organized by JP Morgan. The backing of the United States, through the unprecedented sale of dollars for Argentine pesos in the foreign exchange market, has generated expectations of: a substantial reduction in peso interest rates, a further reduction in country risk to 500 basis points, an expansion of domestic credit, and a reactivation of economic activity. Minister Caputo announced that a cut in interest rates could be implemented in the coming months to stimulate consumption and domestic credit, once exchange rate stability is consolidated and inflation is confirmed to be falling. The Merval stock index rose 3% in the last session, driven mainly by the energy sector. This level places the country in a comparatively more favorable position within the region, although it is still well above Brazil (200 points), Colombia (265 points), and Peru (107 points). Sovereign bonds under New York law showed pronounced increases reflecting renewed investor appetite: Global 2029 (GD29): up 1.39% to $87.48; Global 2030 (GD30): up 1.58% trading at $83.56; Global 2035 (GD35): up 1.48% to $72.53; Global 2038 (GD38): up 1.63% to $75.86; Global 2041 (GD41): up 1.60% to $67.51; Global 2046 (GD46): up 1.54% to $70.70. These values consolidate an exceptional year for Argentine debt, which has accumulated gains of over 80% across all segments of the curve, positioning it among the best-performing bonds globally. US Treasury Secretary Scott Bessent confirmed that the United States has already made profits from the swap activated by the Central Bank of the Argentine Republic (BCRA). Market projections placed the indicator between 2% and 2.4% due to dollar outflows, with the median of the BCRA's Market Expectations Survey (REM) at 2.2%. The City of Buenos Aires registered an inflation of 2.2% in October, maintaining the September level. The consensus of opinions projects that inflation will remain with a ceiling of 2% in November and December, to surely break below that 2 from January 2026. Despite the exchange rate movements of September and early October, when the dollar pressured the top of the band, the pass-through to prices was limited, evidencing a better price formation dynamic in the economy. Market operators interpret the market's behavior as indicating that the package of measures is already coordinated between the Argentine government and the United States. It is also estimated that the total stock of monetary base in circulation (around 23,584,679 million pesos, equivalent to ~$16.8 billion at the official exchange rate) plus bank deposits (totaling ~50-60 trillion pesos, ~$35.7-42.9 billion, plus $35.105 billion in private dollars) sums approximately $70-80 billion, according to BCRA data as of November 7, 2025. Argentine ADRs trading on Wall Street registered mostly gains, following the sovereign bonds' rally. However, we emphasize that Argentine stocks have not yet reached their 2025 peak values, unlike sovereign and corporate bonds, which already show positive returns for the year, suggesting there is room for further appreciation in the stock market. US support is framed in a broader geopolitical strategy. The official announced that the government plans to: repurchase sovereign bonds, particularly GD29 and GD30, using more cost-effective financing sources; begin actively accumulating international reserves; maintain the current exchange rate band system; present a comprehensive financial plan in the next 30 days. Minister Caputo clarified that President Javier Milei has no intention of freeing the exchange rate at this time, but will keep the peso operating within the established bands, although he could consider accelerating the pace of band adjustments from 1% to 1.5% monthly, depending on the evolution of inflation and demand for pesos. The wholesale dollar is at $1,413. The combination of international backing, electoral victory, and fiscal discipline creates a more favorable scenario than observed in previous months. The next 30 days will be key, when the government presents the comprehensive plan that will include the schedule for reserve accumulation and debt buyback, thus defining the economic roadmap for the end of 2025 and the beginning of 2026. A promising future. Market analysts highlight that Argentina may again be experiencing a genuine float of its currency within the bands, without the Central Bank selling dollars to artificially support the exchange rate. The Argentine economy shows signs of recovery with remarkable year-on-year growth rates (between ~3.8-4.2%) and an improvement in public accounts, although stability still faces significant structural risks. With the implementation of the $20 billion swap with the United States (partially used) and the syndicated loan under negotiation with banks and sovereign funds (another $20 billion), the BCRA's gross reserves—currently at $41.118 billion—could be around $60-70 billion for 2026 if accumulated through exports and additional flows, according to conservative REM projections. We anticipate a significant impact on peso interest rates and country risk. The Trump administration has argued that it seeks to prevent Argentina from strengthening dependent ties with China and had conditioned the continuation of its support on a favorable electoral result for the ruling party. The victory of La Libertad Avanza in the October 26 legislative elections, adding political power in Congress, was decisive in dispelling uncertainties and consolidating market confidence in the continuity of the economic program. Despite the market's optimism, some questions persist about the ability to accumulate reserves, the sustainability of the real exchange rate in a context of inflation exceeding the peso's devaluation, and the progress of necessary structural reforms (labor, tax) to consolidate growth. The Argentine market shows well-founded optimism, with bonds at record highs, a stable dollar, and mixed but upward-moving stocks. The fiscal surplus allows the government to meet its commitments without resorting to monetary issuance or unsustainable debt. The National Institute of Statistics and Censuses (INDEC) published today, November 12, the October inflation data of 2.3%.
