Dollar Obsession: Official Standoff Over $1,500, Market Entrenched and "Two Bullets" to Unblock the Economy

Just $4.50. That is the distance that separates the wholesale dollar, which closed the second week of August at $1,487.50, from the $1,492 defended by Scott Bessent, Secretary of the Treasury of the USA, on October 24, 2025, in the session prior to last year's legislative elections. Between one end and the other, there was everything. The official exchange rate closed 2025 at $1,455, after a slow and erratic nominal decline. By 2026, it chained three months of decline, even with a Central Bank (BCRA) that had started to buy reserves steadily. The carry trade had once again become the winning strategy.

This decline occurred in a less friendly external context. The start of the war in the Middle East pushed a 3.3% increase in the global dollar in March, amid greater risk aversion and a Federal Reserve with more restrictive signals. It was not enough to alter a local dynamic that combined currency supply, still attractive peso rates, and expectations of exchange rate stability. With income from the harvest and Vaca Muerta, liquidations of Negotiable Obligations (ON), and loans in hard currency, the dollar hit its annual low on April 15: $1,359. Until then, it had not only lost against an accumulated inflation close to 10%, but it had also fallen 6.6% in nominal terms.

From there, another stage began. The dollar rebounded 0.7% in April and 1.2% in May. In June, it made the largest monthly jump in almost a year, 5.3%, in line with regional currencies. In July, however, it stabilized again: it advanced only 0.2%, the same variation recorded so far in August. Note: so far this year, the official dollar has risen 2.2%, against an inflation around 20%.

The demand for coverage quadrupled in three months

The apparent calm of July perhaps hid the most relevant data. While the dollar barely moved, the market accelerated the demand for coverage that had begun to increase since June. The Treasury expanded the offer of dollar-linked instruments, the BCRA intervened in futures and through bonds tied to the exchange rate, and the Economy even sold nearly $145 million in the official market towards the end of the month.

The private response was a defensive position: futures and dollar-linked bonds, in addition to cash purchases by savers. This is where the standoff of this stage is concentrated: the Government seeks for $1,500 to become an expectation of stability; the market still considers it a price worth covering.

PPI estimates that the stock of foreign exchange instruments of the public sector in private hands went from $3.211 billion at the end of May to $12.118 billion in August. It quadrupled in less than three months.

The Government prioritized the dollar, even at the cost of higher rates

The main definition of the last few weeks was about priorities. Between easing rates for an economy with stalled credit and weak activity or preventing the dollar from surpassing $1,500 again, the Government chose the latter. The decision has an immediate reason. July's inflation was 2.1%, cutting the slowdown of the previous three months and repositioning the exchange rate as the most sensitive variable of the program. With that precedent, the Economy and the BCRA sought to ensure that the correction in June did not have a second round or fuel another round of coverage.

Summary: The Government has once again placed the exchange rate at the center of the program: it intervened -along with the BCRA-, validated higher rates, and relaxed dollar loans. The market is covering itself in futures and dollar-linked instruments, although no exchange jump is anticipated, for now, in the coming months and the beginning of 2027.

The cost of the strategy appeared in the rate and in the reserves. The BCRA moderated its purchases of foreign currency to avoid adding pressure on the market (in the first week of August, the daily average was only $22 million, the lowest so far this year), while liquidity in pesos remained much tighter than in previous weeks. The caution rate increased from a TNA close to 20% to around 23%.{#p-1787050697601-65033}

The strategy, it is true, managed to reduce exchange rate tension, at least in the short term. Open interest in ROFEX, which had jumped from $2.790 billion in May to $4.526 billion in July, retreated to the area of $4.000 billion. The demand for coverage eased, although it remained well above the levels prior to the exchange rate correction.{#p-1787050697601-42541}

Another negative consequence of the virtual ceiling of $1,500 was observed in Argentine assets. The Investment Committee of Criteria warned that "the proximity of the wholesale dollar to $1,500 began to condition exchange rate policy". Defending that level limits the margin for accumulating reserves and makes the simultaneous management of the exchange rate, interest rates, and liquidity more demanding.{#p-1787050697601-475}

Although not all the punishment to the bonds can be explained by the dollar. The country risk climbed to 489 basis points, with a 19% increase in two weeks, and the S&P Merval measured at CCL fell below $1,900, a three-month low. Econviews pointed out that the deterioration of the index measured by J.P. Morgan was greater than that of comparable countries, such as Ecuador and Egypt, and linked it mainly to the deterioration of the Government's image in the polls.{#p-1787050697601-85833}

The Government managed to maintain the $1,500 zone, but now needs that stability not to turn into permanently higher rates, lower accumulation of reserves, and an economy without recovery.{#p-1787050697601-8547}

The Dollars Being Purchased {#p-1787049101834-77552}

The obsession is not only in futures or dollar-linked securities. It also persists among savers. The latest exchange report from the BCRA showed that individuals purchased a net $2.445 billion in bills and currencies for unspecified purposes in June. In the first half of the year, they accumulated $15.300 billion. There are about 1.5 million people who buy, on average, about $2.000 billion monthly since the beginning of the year. The positive aspect: a significant portion remains within the financial system and, therefore, does not immediately impact reserves. Nevertheless, it constitutes the backdrop of the standoff: even with a stable dollar, private savings continue to seek coverage.{#p-1787049101834-71927}

To this flow are added other factors that limit the net supply of foreign currency. In June, companies remitted $1.023 billion in profits and dividends, a figure not seen since 2010. The accumulated liquidation of foreign trade, meanwhile, remained below that of last year, despite a more valuable agricultural campaign.{#p-1787049101834-48136}

The "Two Bullets" to Reactivate: Dollar Credit and FGS Funding {#p-1787049101834-28401}

Defending the $1,500 is not enough if the economy does not recover. With credit in pesos flattened by positive real rates and a delinquency that reached record levels, the Government decided to move pieces. On one hand, it relaxed companies' access to dollar credit and, on the other, revealed that it is studying the use of the investment horizon of the FGS of ANSES to generate long-term banking funding.{#p-1787049101834-8983}

The first "bullet" targets the dollars already within the financial system (for those outside, approval of Fiscal Innocence II is awaited). Foreign currency deposits exceed $43 billion. The new regulation allows banks to finance non-exporting companies up to the equivalent of 15% of those deposits, with higher capital requirements and evaluation of the exchange rate risk of each borrower.

The potential is around $6 billion, although its effective impact will depend on whether companies are willing to take on dollar debt while earning mostly in pesos. For the government, the operation will have a dual effect: financing private investment (which has yet to take off) and, due to the obligation to liquidate foreign currency in the MULC, adding supply to the official market. If both pieces fit together, credit can provide some relief to activity without decompressing exchange rate defense.

The second "bullet" targets the mortgage market. Caputo confirmed that the Ministry of Economy is working with Human Capital on a mechanism for the ANSES Sustainability Guarantee Fund to auction long-term fixed terms among banks. This involves the FGS offering funding for several years to reduce the mismatch between short-term deposits and loans that can extend for decades.

The combination seeks to move both ends of the real estate market: dollar credit for developers and long-term funding for banks to expand mortgage offerings to buyers. The REM forecasts a 0.4% quarterly decline in the second quarter, before a 1% recovery in both the third and fourth quarters. The government aims for credit to help facilitate this improvement. For now, these are measures in the initial stage. The same confidence that the dollar will remain under control, which can generate foreign currency supply, will determine whether companies, banks, and families are willing to transform these tools into investment, construction, and consumption.

Dollar: What price does the market set until 2027

For now, projections do not show a frozen dollar for the coming months. They indicate a managed increase. The July REM projects a wholesale price of $1.512 for August, $1.546 for September, $1.577 for October, $1.618 for November, and $1.652 for December. From the closing price of $1.487.50 on Friday, this last figure implies an increase of 11.1%, or $164.50.

The implicit monthly trajectory in the REM is 2.25% between August and September, 2.01% in October, 2.60% in November, and 2.10% in December. This is a depreciation slightly above the average inflation of 1.85% that the survey expects for the remainder of the year: a gradual real correction, without a discrete jump.

The A3 futures are more cautious. The curve on Friday adjusted to $1.501.50 for August, $1.527.50 for September, $1.556 for October, $1.586.50 for November, and $1.616.50 for December. The last price implies an increase of 8.7% from the current wholesale price, about $129, and is $35.50 below the REM projection. Between September and December, futures discount an average depreciation of 1.86% monthly, almost identical to the expected inflation. The TAMAR rate projected by the REM, close to an effective monthly rate of 1.9%, is just above the expected CPI, but practically tied with the implicit yield of hedging in futures.

The curve extends to 2027: $1,648 in January, $1,678 in February, $1,710 in March, $1,741 in April, $1,772 in May, $1,805 in June, and $1,836 in July. For now, it does not incorporate a jump associated with the election year in the first seven months of 2027. It does account for a dollar that continues to rise in an orderly manner, at a rate of between 1.7% and 2% monthly.

This is the promise that the Government must uphold: that the dollar does not remain stagnant, but also does not escape; that the rate retains pesos without further suffocating credit; and that the dollars that today serve for coverage transition to finance investment and activity. At least for now, the $1,500 has ceased to be a quotation in itself: it has transformed into the point where inflation, reserves, credit, and, above all, confidence intersect.