Pimco ($PIMCO), the world’s largest active bond manager, urges President Milei to let the peso float amid a 21% surge in Argentina’s FX reserves. The call comes as investors track the focus keyphrase: Pimco urges Milei let peso float, surprising markets given recent signs of tentative stability.
Pimco Calls for Peso Float Amid 21% Reserve Spike in 2025
Pimco ($PIMCO) has publicly advocated for President Javier Milei to allow the Argentine peso (ARS) to float while conditions favor the move, citing a 21% gain in gross foreign exchange reserves since July 2025, according to Banco Central de la República Argentina data. Argentina’s reserves reached $33.4 billion as of October 31, compared to $27.6 billion at the start of July (Bloomberg, Nov. 2025). Pimco’s latest commentary, distributed via private client notes reviewed by Reuters, argues that delaying the float risks losing hard-won stability. The peso currently trades near 910 ARS/USD in parallel markets, compared to 841 on official rates, highlighting persistent dual pricing despite government interventions.
Argentina Currency Liberalization Could Spark Market Volatility
Analysts suggest that moving to a free-floating peso, while reserves are at a two-year high, might initially drive volatility across Argentina’s bond and equity markets. In the last major float attempt in 2018, the peso lost 30% against the dollar in under three months (Reuters, Aug. 2018), sparking capital flight and equity sell-offs. However, recent International Monetary Fund reports note investor positioning has grown more cautious, with the MSCI Argentina Index up 17% in Q3 2025 but little retail inflow (MSCI; IMF Article IV, Sept. 2025). Policy shifts toward currency liberalization typically pressure import-dependent sectors and may inflate consumer prices before equilibrium emerges.
Investor Positioning: Hedging Strategies for Peso Volatility
Investors exposed to Argentine debt and equities are reassessing hedge strategies in anticipation of a potential float. Dollar-linked bonds from Argentina’s sovereign issuance, such as the Bonar 2030 ($A2E7), have traded with yields narrowing from 41% to 38% since July—reflecting waning pessimism, per Bloomberg fixed income data. Equity fund flows remain conservative, with foreign institutional allocations at 27% of total market cap versus 35% pre-2018. Market participants are increasingly turning to dollar-indexed instruments and forex hedges. For detailed forex trading insights and up-to-the-minute latest financial news, investors weigh the timing and magnitude of a possible peso move. Watching the BCRA’s reserve management and forward guidance will be key for recalibrating Argentina risk exposure.
What Analysts Expect Next for Argentina’s Currency Markets
Industry analysts observe that a prompt move to a floating peso could attract renewed capital flows in the medium term, provided monetary tightening continues. Investment strategists at Morgan Stanley and Citi (research notes, Q3 2025) contend that swift action may support Milei’s pro-market credibility, though short-term pressure on equities and local bonds is likely. Market consensus suggests that communication and pace of transition will shape the market’s reaction through year-end 2025.
Pimco Urges Milei Let Peso Float: A Signal for Bold Market Reform
Pimco urges Milei let peso float as foreign reserves swell and dollar inflows stabilize, signaling rare alignment of favorable conditions. Investors should track BCRA interventions, parallel peso rates, and macro guidance to position for near-term volatility and potential value opportunities in 2026. The coming months may define Argentina’s reform narrative for global markets.
Tags: Pimco, ARS, Milei, forex, Argentina currency
