Toto Caputo: 'We're not going to let any money go to the market'

The Minister of Economy,  Luis Caputo, indicated that the Argentine financial market continues to reflect a high political risk that affects asset valuation, even after the macroeconomic progress achieved in recent months.

"The market is pricing in a political risk, the specter of a return to evil and chaos, and that's important for the market", he stated in an interview with the streaming channel Carajo.

Caputo recalled that in December the country risk was at 550 points and that, despite lifting the currency controls, recapitalizing the Central Bank with an agreement with the IMF, adding USD 5,000 million to the reserves, and sustaining the disinflation process, the indicator remains above 400 points due to  political uncertainty.

Bonds, debt, and electoral context

The official warned that this perception of instability also impacts peso-denominated bonds and external debt.

Although he highlighted the improvement in fiscal accounts and reserves, he warned that the electoral period conditions market expectations, since investors not only look at economic essentials, but also at the possibility of a change of course that could alter the current balance.

Exchange rate policy and liquidity control

Caputo defended the floating exchange rate scheme, recalling that similar movements in the dollar had already been recorded in January and July 2024, and in March 2025.

In July, the exchange rate rose 13.6%, but after discounting the peso rate, the effective increase was less than $100. In the first days of August, the currency fell $85 in nominal terms and another $40 considering the rate.

"The key is that when there are no pesos in the market, the dollar can go up or down. We're not going to inject pesos in this context, not even to buy dollars", he emphasized.

Interest rate and monetary discipline

The minister reiterated that the interest rate is endogenous and that the market will determine its level. He assured that an increase in the monetary base will not be validated unless it responds to justified causes, such as greater credit.

"In a context of electoral noise, the last thing we're going to do is allow pesos to go into the market", he stated, and linked the definition of rates to legislative activity:  "What is the equilibrium rate of a Congress that passes 12 laws to break fiscal balance in two weeks? The market will say."

No dollar purchases until after the elections

Caputo ruled out Central Bank intervention by buying foreign currency before the elections. According to his explanation, doing so would mean injecting pesos, which could be interpreted as a sign of monetary relaxation.

"The priority is to maintain exchange rate stability as a pillar of the economic program", he concluded.