With the BCRA accumulating reserves, the country risk at its lowest in recent years, and Argentine stocks leading gains on Wall Street, confidence solidifies Javier Milei's course
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The Central Bank of the Argentine Republic (BCRA) continues to consolidate its successful process of accumulating reserves, reaffirming the effectiveness of the monetary plan that has restored predictability to the country. On a day characterized by robust activity, the monetary authority managed to absorb USD 25 million in the spot market, demonstrating a sovereign intervention capacity in the face of a private supply that flows normally under the new rules of the game.
This strategic purchase occurred in a context of high confidence, where the volume traded in the cash segment reached USD 818 million, the highest figure since April 24, evidencing a vibrant and deeply liquid financial market.
Buying and selling dollars
The strength of the exchange rate scheme allowed the wholesale dollar to settle at $1,481.50, its highest value in eight months, perfectly aligning with the path confirmed by the economic team for the month of June, which accumulates a 5% adjustment. Far from any signs of instability, the firmness of the currency reflects an economy that is formalizing and a State that has ceased to be a burden on the market.
In this regard, the renowned agent from PR Corredores de Cambio, Gustavo Quintana, emphasized that “the volume traded today in the wholesale segment is the highest since April 24”, while Nicolás Merino, from ABC Mercado de Cambios, highlighted the currency's momentum towards the end of the session due to the intense month-end activity.
This masterful performance by the BCRA occurs within a framework of total legal security. In response to rumors of possible turbulence, President Javier Milei was categorical in stating that the Government is “hyper-shielded” against any speculative attack.
The president assured that the country has an impregnable financial shield to face currency runs, guaranteeing that the savings of Argentines and the stability of the currency are not subject to the ups and downs of lagging sectors. As proof of this calm, gross international reserves stand at USD 46.666 billion, a level sustained by efficient asset management and strict compliance with international obligations.
International Reserves 2019-2026
Confidence in the direction of the libertarian management spilled over into all national assets. The S&P Merval index of the Buenos Aires Stock Exchange climbed 1.7% in pesos, reaching 3,176,751 points, while sovereign bonds in dollars —Globales and Bonares— averaged a rise of 0.4%, with outstanding performances in the longer duration securities.
Consequently, the country risk calculated by JP Morgan plummeted to 431 basis points, reflecting that Argentina is now seen by the world as a safe and profitable destination. Shares of Argentine companies on Wall Street also celebrated: Satellogic surged its value by 22.1% and Edenor climbed 4.9%, confirming that global capital is betting on the Argentine renaissance.
Finally, the international scenario provided a tailwind that the Government skillfully capitalized on. On Wall Street, the Dow Jones Industrial Average made history by breaking the 52,000 points ceiling for the first time, in a nominal record driven by the institutional stability of the Federal Reserve and the easing of tensions in the Middle East.
In this climate of global euphoria, Damián Vlassich, Team Leader of Investment Strategies at IOL, highlighted that “Argentine assets also experienced a rebound in both equity and fixed income”, while Francisco Speroni, analyst at Cohen Aliados Financieros, pointed out that “the Argentine banking sector shows signs of stabilization”, with profitability already bouncing back from its lows. The Argentina of Milei is no longer an observer but a protagonist of global financial success.
