After Luis Caputo placed a dollar bond this week, the bank JP Morgan commented on this a recalibration of the dollar I would be “positive” so that Argentina attracts more capital from international markets.
“A recalibration of the exchange rate framework and the introduction of a reserve accumulation program Catalysts would be rule-based positive for loans that allow Argentina Leverage US support, attract direct investment and rebuild financial cushions before the 2027 election cycle.”
JP Morgan’s appearance is consistent with what it did months ago The IMF in its report Economic Outlook for Argentina: As the country accumulates more reserves, the chances of accessing markets improve, and not the other way around, the organization assured.
Also the background Pimcoone of the largest in the world, expressed himself in the same words when one of its key executives warned that the peso was overvalued and that As a prerequisite for investing in local securities, the country would have to make a correction after a full IPO. “Foreign investors like us will not invest in local assets when the currency is at this level, period. Period,” said managing director Pramol Dhawan, head of emerging markets portfolio management at Pimco.
JP Morgan is the largest bank in the United States and its CEO, Jamie Dimon, met with Javier Milei in Buenos Aires weeks ago. And Caputo in recent months has attended bank meetings organized for investors who closely follow Argentina.
This Wednesday, the Secretary of the Treasury received $910 million through the issuance of a four-year bond of $1,000 million with a coupon of 9.26%.
“It was a first step to restore market access”JP Morgan defined the move on Wednesday. The next day, the Treasury complemented this operation with the final tender of the year: it placed $21.3 billion, more than enough to cover maturities. The rollover rate was 102%.
Inflation data for November (2.5%) on the same day, Thursday, “a yellow light came on” said former finance minister Miguel Kiguel. The dollar’s rise after the shares’ release “largely explained the recovery” in prices and “it would be a mistake to delay it again.”
JP Morgan expects progress on the reform agenda that the government will implement in the first half of 2026 and a decline in sovereign risk. However, he insists that the country must reap the benefits of the financial diplomacy that Javier Milei’s government has carried out with the United States and Wall Street. “A recalibration of the exchange rate framework and the introduction of a rules-based reserve building program would be positive catalysts for credit.”
Therefore, he said in his report that this week’s financial operation was “a small step toward restoring market access, but not a giant leap.”
The $910 million covers part of the $2.7 billion due on January 9th. The difference is expected to be covered by some repo transactions with banks.
Pimco said something similar a month ago. “Without clarity on how the remaining January commitments will be met, and until Argentina delivers on its promise to advance supply-side reforms and begin accumulating foreign reserves more clearly, it is difficult to see when and at what price Argentina might attempt to enter the international bond market on its own.”
For his part, Kiguel said this “The problem is that the credibility of this bond is fragile. At a time when the central bank needs to buy reserves, it has little firepower to deal with an eventual run. This will become even more critical if, as appears to be the case, the United States Treasury is unwilling to continue buying pesos through currency swaps and if the IMF continues to pressure the central bank to buy dollars in the market.”.
Daniel Artana, chief economist at Fiel, said this week: “The government should correct the range, but that is not easy. What matters is what is done with the cap ($1,517).” For According to the economist, the ideal time for the harvest dollar to occur would be when there is downward pressure on the exchange rate and the dollar moves away from the upper limit of the band (April-May).
Caputo defended the bands, arguing that they dampen volatility in a country like Argentina. He insisted there would be no changes and that this had been agreed with the IMF. He also said the Treasury or central bank could buy dollars without having to issue debt to sterilize the pesos that would eventually be pumped into the market amid expected economic recovery. The program with the IMF envisaged a remonetization of the economy. The government expects more dollars to come from the country and announced that Argentines’ dollar purchases began to decline (from $5,300 in October to $1,100 million in November) and that holdings will be made more flexible in 2026. The government has admitted in recent weeks that the market demands higher reserve accumulation.
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