The real exchange rate rose 17% and inflation did not respond: the government is committed to maintaining the float despite exchange rate pressure.

The multilateral real exchange rate has advanced 17% since the start of the new floating exchange rate scheme , without triggering an inflationary surge, and the government believes that, even with pressure on the dollar, the exchange rate policy remains effective . The appreciation of emerging currencies, such as the Brazilian real, has contributed to improved competitiveness, in a context where economic activity is showing mixed signals and investors are closely monitoring official decisions.

One of the key factors behind the exchange rate pressure is the strong public demand for dollars for hoarding. Some USD 2 billion were purchased in May alone, and the mid-year bonus boosted this trend in June. Although the agricultural sector sold between USD 350 and 500 million daily, the flow was not enough to stem the dollar's rise.

Added to this was JPMorgan's decision to unwind its peso-denominated bond positions. The so-called "carry trade" had been profitable in previous months, but the institution considered that the rate of nearly 3% per month no longer compensated for the risk . Other investors followed suit, although the volume is limited: it is estimated that foreigners held around USD 2.5 billion in local currency bonds, far from the USD 30 billion in 2018, before the currency crisis during Mauricio Macri 's administration.

One factor that helped improve the real exchange rate without the need for a sharp devaluation was the appreciation of the real, which rose from 6 to 5.40 per dollar since the beginning of the year. This led to an improvement in competitiveness without directly affecting prices.

In fact, inflation remained under control. Although June showed a slight acceleration toward 2%, the BCRA 's Market Expectations Survey predicts that price increases will remain between 1.5% and 1.7% monthly at least until the end of the year . According to economists, the dollar's pass-through to prices would be limited by subdued consumption, competition from imported goods, and the recent experience in April, when markups were subsequently unjustified.

While the coming months could bring renewed tensions, the overall outlook remains favorable. The ruling party emphasizes that pressure on the exchange rate began earlier than expected, but the floating system is working. Furthermore, there are no signs of a significant rise in inflation, and political support is consolidating ahead of the October legislative elections, where the ruling party appears to be the favorite.

However, reports such as that of LCG warn that starting in the third week of July, with lower agricultural sales, the dollar could seek new ceilings. On the contrary, the IEB maintains that the CCL is close to its equilibrium value, around $1.229, and that there is still room for carry trades.

Interest and principal payments on dollar-denominated bonds will reduce the reserve stock this week, possibly below USD 39 billion . But this is seen by investors as a positive sign of commitment to the obligations.

In parallel, the economic team continues negotiations with the IMF. This week, José Luis Daza and Pablo Quirno traveled to Washington to finalize the first review of the agreement. The point of discussion is the accumulation of reserves. The government seeks to avoid purchases in the official market and is leaning toward alternatives such as the Treasury acquiring dollars without impacting the MULC.

Regarding BONTE 2030, exchange rate pressures led to the temporary suspension of new issuances. Despite this, the goal of raising USD 1 billion per month remains in place, although it currently appears ambitious.

The start of the second half of the year reveals a more challenging context. Tax revenues linked to economic activity fell in real terms, car sales slowed, and loan delinquencies increased. However, local and international analysts agree that the outlook remains promising.

The combination of fiscal discipline, a competitive exchange rate, contained inflation, and political support puts the government in a strong position to face what lies ahead. Even with the challenges, optimism remains in the markets, and investment recommendations for Argentina continue to grow.