Argentina's overnight peso funding rate surged to 190% annualized Thursday as peso and dollar bonds weakened, underscoring volatility surrounding government debt ahead of next week's Treasury auctions, Bloomberg reported.
In late trading Thursday, the rate on one-day peso repos was 190%, up from 26% Wednesday. Bloomberg said it was Argentina's highest reading since the October 2025 midterm elections.
The market swings followed heavy trading Wednesday in peso notes due in 2029 and 2030. Volume exceeded 3 trillion pesos, about triple the usual level, and the notes gained more than 4% that afternoon before losing ground Thursday.
Worries about next year's presidential election and coming sovereign debt payments had also weighed on Argentine assets. Longer-maturity peso bonds fell sharply in early November. EconoTimes previously covered the country-risk debate ahead of Argentina's 2027 election.
The scale and concentration of Wednesday's trades led brokerage PPI, consultancy 1816 and Martín de la Fuente, a strategist at Buenos Aires Valores, to cite possible official participation. De la Fuente estimated the purchases at about 2 trillion pesos, or $1.3 billion. Argentina's Economy Ministry and central bank declined to comment on the speculation, Bloomberg reported.
Argentina's dollar bonds also led emerging-market declines Thursday. Some notes lost 2 cents per dollar, and some maturities touched their lowest levels since October 2025. De la Fuente said concerns over next year's debt payments were weighing on the dollar-bond curve; Argentina faces roughly $25 billion in hard-currency payments in 2027, Bloomberg reported.
De la Fuente also said higher international interest rates were pressuring dollar bonds, with the effect reaching peso debt. Grit Capital strategist Belisario Álvarez de Toledo said the government was putting exchange-rate stability ahead of stable interest rates, a choice he said could bring significant rate swings.
PPI's research note identified lower yields as the likely purpose of the suspected purchases ahead of next week's final Treasury auctions of the year. It put maturities at about 10.5 trillion pesos for the coming sale and 66 trillion pesos across the two auctions after it.
