Luis Caputo stated that he is “more than comfortable” with the dollar hovering around $1,500, and that there will be no changes to the exchange rate scheme after the elections. The minister has already lost all kinds of credibility and continues to play tricks while the crisis worsens. Maintaining this intervened price has a very high cost, it is being paid using borrowed dollars and with the direct “help” of the United States Treasury, in exchange for total subordination to North American imperialism.
In recent weeks, the Central Bank (BCRA) intensified its interventions in the dollar futures market to contain devaluation expectations for the coming months. In September alone, the BCRA’s sold position increased by US$ 1.8 billion, reaching a total of US$ 6.8 billion. In mid-October, the amount traded would have already exceeded US$7 billion according to different estimates, the highest level so far this year.
These operations consist of agreeing on a future price of the dollar: if the real price exceeds the agreed value, the Central Bank must pay the difference in pesos. No real dollars are given, but an increasing cost is assumed. This adds a financial problem for the government, to the political cost that a devaluation would entail. Future dollar contracts concentrated in October imply a time bomb: if the peso devalues, the BCRA will have to compensate the difference.
After the defeat in the Buenos Aires elections, Milei and Caputo looked for a lifeline in Donald Trump and Scott Bessent, the North American Secretary of the Treasury. It was then that Washington’s “direct assistance” agreement to support the exchange rate was finalized. According to economist Amílcar Collante, the United States Treasury has already spent about US$1.8 billion to shore up the Argentine peso since it burst into the local market. Adding the interventions of the Treasury, the BCRA itself, and Bessent’s maneuvers, more than US$5 billion were injected directly into the exchange market.
Caputo pretends to be in a solid situation: “We have a capitalized Central Bank, economic fundamentals like Argentina never had and financial support from the United States like no country in the world,” he boasted in an interview in La Nación+. But behind the triumphalist speech hides an unprecedented dedication. This “financial support” is not free: Washington demands guarantees. The terms of the agreement are not known, but no one doubts that they imply new conditions in favor of American corporations: more privatizations, total opening of the economy and the delivery of natural common goods such as lithium or uranium, among others.
Debt or devaluation: a false dichotomy
The government seeks to establish that it can keep the dollar contained, that the financial problems would only be temporary and that it is avoiding a drastic devaluation that would be the only alternative. But that is a false dichotomy, a trap for the vast majority who would always lose.
A backward dollar implies a slowed economy, liquefied salaries, job destruction and increasingly suffocating debt. A devaluation, for its part, would mean a direct blow to the popular sectors, transferring the adjustment via inflation.
The “order” that Milei and Caputo promise is built on submission to the designs of imperialism. Trump and Bessent did not come to help: they came to guarantee that Argentina continues to be a subordinate country and source of business for concentrated capital from the north.
While investment funds make million-dollar profits from the carry trade and the government kneels before Washington, the consequences are paid by working people. The Central Bank’s reserves evaporate to support a scheme that only benefits speculators. Each intervention in the futures market is a transfer of public resources to financial capital.
The increase in external debt is not a solution, but a trap. It reinforces dependency and weakens sovereignty. Therefore, the only real way out is not to choose between more debt or more adjustment, but to break with both paths. We need an alternative that recovers control of resources and foreign trade, that nationalizes the banks under the control of the workers and that democratically plans the economy based on social needs, not the profits of a handful of businessmen.
In this scenario, a good result for the Left Front in the elections would be a support point to build that perspective: to fight for a way out of the majority, without mandates from the IMF or Washington, and to end the permanent blackmail of debt and dependency.
Source: www.laizquierdadiario.com
