The Central Bank sold USD 3.812 billion in futures: the largest intervention in three years to curb the dollar and contain exchange rate uncertainty.

The Central Bank of the Argentine Republic (BCRA) confirmed this Friday that July was the month with the highest level of intervention in the dollar futures market in three years . According to official data, the entity headed by Santiago Bausili ended the month with a net short position of USD 3.812 billion , an increase of almost USD 2 billion compared to June.

The operation sought to contain the currency surge: despite the massive sale of contracts, the dollar accumulated a rise of more than 13.6% in July . This was the largest intervention since August 2022, when Sergio Massa took office as Minister of Economy in the midst of a run on the peso.

The government's approach was clear: to use futures as a "safety valve" in a context where net reserves remain in critical territory and the band system limits the sale of spot dollars. In practice, the monetary authority chose to curb exchange rate volatility without further compromising its reserves , at the cost of expanding its liabilities in pesos.

Economist Hernán Letcher explained that since the beginning of August, open exposure in futures has grown by an additional USD 850 million. " This shows that interventions exceeded USD 4 billion in just a few weeks, in line with the strategy of sustaining the carry trade and moderating devaluation expectations ," he noted.

According to private calculations, the Central Bank's intervention between May and July resulted in losses of nearly $500 billion due to price differences in the dollar futures market. Since contracts are settled in pesos, these losses generate additional monetary issuance , which reinforces the medium-term inflation risk.

The International Monetary Fund had already warned that the intensive use of futures contracts "should not replace other monetary policy tools." Although they do not directly affect reserves, the contracts increase the fragility of the Central Bank's balance sheet and increase the quasi-fiscal cost.

The most famous example is 2015 , when, under Alejandro Vanoli 's administration, the Central Bank accumulated short futures positions equivalent to USD 17.5 billion , resulting in negative net reserves. The initial devaluation by Mauricio Macri's administration resulted in losses equivalent to 14% of the monetary base at the time.

Although the current scheme is much more limited—the Central Bank of Argentina (BCRA) imposed a self-imposed limit of USD 9 billion—critics point to the fact that the use of futures is merely a temporary stopgap . As the consulting firm Quantum pointed out, "these hedges offer temporary relief, but they do not resolve the underlying imbalances."

President Javier Milei insisted that the market will not validate the transfer of the dollar's rise to prices. This is because "there is no uncontrolled monetary issuance." During the Council of the Americas , he reaffirmed that the economic path is sustained by fiscal discipline and urged business leaders to "lessen their complaints about interest rate volatility."

The challenge now will be to sustain the intervention scheme without exceeding the self-imposed limit. And, above all, without raising doubts about the program's consistency under the watchful eye of the IMF.