Argentina's central bank has allowed a slight weakening of the peso to 353 per dollar, reactivating its 'crawling peg' for the currency. The peso had been frozen at 350 per dollar since a primary election in mid-August following a sharp devaluation. The decision to allow a modest depreciation is seen as an effort to adjust the currency's value gradually.
The peso opened down 1.4% at 355 per dollar but quickly adjusted slightly to 353, in line with the central bank's plan to implement a crawling peg. The Secretary of Economic Policy, Gabriel Rubinstein, had previously announced on social media that the peso would be put back on a crawling peg from November 15, allowing it to devalue by around 3% monthly.
This move comes as Argentina faces economic challenges, and the peso has been subject to varying degrees of capital controls since 2019. The country is also preparing for a presidential election, with voters set to choose between Peronist Economy Minister Sergio Massa and ultra-liberal outsider Javier Milei, who has proposed dollarizing the economy and shutting down the central bank. The election outcome could have implications for economic policies and the direction of the peso.