Argentine financial assets sold off this week after Economy Minister Caputo announced that the central bank will start to sell dollars in the parallel market. The plan shows that the government is clearly prioritising the fight against inflation over addressing the overvalued peso, which will make it even harder to rebuild FX reserves. That’s especially concerning given that Argentina faces large FX repayments at the start of next year. Elsewhere, the latest activity data suggest that, having generally made a decent start to the year, many countries in Latin America struggled in Q2.
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