Photo: Fernanda Corbani

The key exchange rate between the US dollar and Argentine Peso opened unchanged at the start of trading on Argentina’s financial markets Friday, unmoved at AR $17.38 from Thursday when public banks in Buenos Aires City and Buenos Aires province intervened to sell dollars and thus stabilize its price following a week of sharp increases.

Local daily Ambito Financiero reported that traders attributed the stabilization to “the appearance of strong orders to sell private entities in a day (Thursday) that had a marked volatility, with abrupt trend changes and a significant difference between highs (US$17.37) and lows (US$17.07).” 

As The Bubble reported earlier in the week, the US dollar opened to a series of increases since Monday, hitting record highs up to US$17.52 at noon on Thursday before dropping several cents to US$17.38 at the open of trading and US$17.33 at the time of publication.

Eleven consecutive increases in total up to this point forced the Central Bank’s according to local media. Rather than liquidate a slice of its own reserves to curb the soaring price of the dollar, however, it encouraged public banks in BA City and BA province to sell private stocks of dollars and so stabilize the price.

As trading continues today the question remains whether the current rate represented a new “ceiling” in the dollar’s price versus the Argentine Peso or whether the market was simply “taking a breath” before continuing the trend of sharp increases.

“The volatility in the peso will continue at least until the PASO primary elections in August, where the intention to vote of the population will be known with certainty,” commented Financial Analyst Sebastián Centurión in conversation with Ambito Financiero.

Treasury Minister Dujovne released a statement to the press saying that the fall in the value of the peso against the dollar will not “generate more inflation” and that government invention is not necessary at this point in time.