Argentina's FX rates converge as Milei seeks stronger peso

BUENOS AIRES, April 29 (Reuters) - Argentina's foreign exchange rates converged on Tuesday to their closest points since 2019 following the recent easing of the country's exchange rate policy and an agreement with the International Monetary Fund.

The gap between the official and the black market peso rates stood at 0.5%, the lowest since capital controls were most recently imposed in late 2019 and an abrupt decrease from the 200% gap registered in 2023 when libertarian President Javier Milei took office.

Argentina's official peso ARS=RASL was trading steadily, with a slight improvement of 0.26% to 1,176 pesos per dollar, while the black market exchange rate improved by 0.42% to 1,200 per unit ARSB=.

"The surprising drop in foreign exchange rates (rise of the peso) is partly a result of increased confidence following the generous IMF credit and the reduction of regulations," VatNet Financial Research said.

Banks in Argentina are offering enticing interest rates that encourage savers to stay in pesos and later get a higher value in dollars, aiming for the so called carry trade.

Since mid-April, Argentina's government has undone large parts of the country's currency and capital controls allowing the peso to float freely within a far wider trading band of 1,000-1,400 pesos per dollar.

Milei's government has bullishly claimed it wants the official rate to hit the lower end of the trading band.