Argentina: As primary elections get closer, pressure on the peso increased, testing the Central Bank´s capacity to minimize exchange rate volatility
- During last week, the effect of political uncertainty from nearby primary elections was more evident. A significant rise in the exchange rate early in the week was offset by the sale of futures by the CB, giving clear signals that FX stability remains a priority.
- Additionally, June construction costs (ICC) and wholesale prices (IPIM) reports were in line with consumer inflation figures, showing a decelerating trend. The ICC rose 1.7% m/m, following a 3.0% rise in May. While the IPIM increased 1.7% m/m, due to Food and Agriculture Products, as the Import Products component fell 0.08% m/m due to relative strengthening of the peso during the month.