Argentina looking for market leaders to help stabilize the peso – sources

BUENOS AIRES, March 15 (Reuters) – Argentina's central bank wants to allow market makers to stabilize its peso currency when the Treasury starts sales announced in dollars in April, two people informed directly about the plans announced to Reuters on Friday.

The bank hopes that market makers, traders who agree to buy and sell at fixed prices, will strengthen the liquidity of the foreign exchange market in order to avoid the strong fluctuations experienced by the peso in recent weeks. , reaching a record high of 42.5 pesos per dollar trade thin.

"We will take advantage of the existence of this auction to promote the creation of market makers in the foreign exchange market, which does not exist yet," said one of the officials. "This is something we are discussing with the banks and it will most likely start with Treasury offers."

Both sources asked not to be named because the plan was not made public. The Argentine central bank declined to comment.

Argentine Treasury Minister Nicolás Dujovne revealed on Thursday that the Treasury would sell $ 9.6 billion from April to the end of the year through daily auctions of $ 60 million, with the aim of acquire pesos to pay current expenses.

The announcement came after a sharp decline in the peso, led by emerging doubts about the progress of the economy and the rise in political uncertainty generated by the next general election in October.

The second person stated that the bidding of dollars "would provide liquidity at a time when it is possible that, given the uncertainty of the electoral process, the market is experiencing such a dynamic", referring to the volatility of the market. .

The Argentine peso recently remained in an intervention-free trading range that came into effect last year, but the central bank is concerned about the volatility of a market where liquidity may be low.

"One thing is the value (of the peso), and another thing when the variations are very steep and with little cash," said the second person. "This type of dynamics is disruptive." (Report by Eliana Raszewski, edited by Adam Jourdan and Phil Berlowitz)