One country began selling off dollars due to economic problems

Argentina's Central Bank intervened in the foreign exchange market for the first time since April, starting to sell dollars to support the peso exchange rate, Bloomberg reports.

The regulator decided to sell currency amid economic difficulties. According to the daily report on foreign exchange reserves, on Wednesday the Central Bank already sold 53 million dollars due to the sharp weakening of the peso.

After the April deal with the International Monetary Fund for 20 billion dollars, the Central Bank lifted currency restrictions and allowed the peso exchange rate to fluctuate freely. To stabilize the national currency, President Javier Milei announced the sale of dollars through the Argentine Treasury and launched futures contracts for foreign currency. In addition, the government limited the demand for dollars from brokers and introduced limits on the accumulation of dollar positions.

The authorities are now trying to balance between controlling inflation through currency stability and maintaining dollar reserves to continue debt payments. Investors warn that supporting the peso at a high level could be costly, as the central bank's net cash reserves remain very low. This situation weakens Milei's position ahead of upcoming elections, and his approval rating is at a record low - more than 53 percent of the population oppose him.