Argentina Peso Strengthens Past 1,400 Despite Global Turmoil

Argentina’s peso strengthened past 1,400 per US dollar, even as the Iran war unsettles global markets. It was one of only two emerging market currencies to gain against the dollar in March, despite a broad selloff in developing FX. After more than a decade of persistent weakness, the turnaround is being driven by strong agricultural exports, rising energy shipments from the Vaca Muerta shale basin and increased dollar borrowing by local firms, including recent international bond sales. Seasonal harvest inflows and high commodity prices are boosting export revenues, with Argentina’s trade surplus surging early in the year. Capital controls are also limiting speculative outflows, anchoring the currency to real trade flows. Additional support comes from renewed access to global markets, helping the central bank build reserves. However, risks remain as inflation persists and bond spreads widen, raising questions about the sustainability of the peso’s strength.