Group 1 - The Argentine central bank has spent $1 billion to defend the peso amid a political crisis, selling over $1 billion in foreign reserves within three days to support the currency [1] - The central bank's actions included a record sale of $678 million in a single day, the highest since October 2019, as the peso continues to depreciate [1] - The Argentine government received a $20 billion loan from the IMF in April, which led to the relaxation of long-standing currency controls and the introduction of a new exchange rate regime [1] Group 2 - Despite significant government spending to support the peso and stricter trading controls, investor confidence remains low, leading to a mass exit from the market [2] - The Argentine S&P Merval index has performed poorly compared to over 90 global benchmark indices tracked by Bloomberg [2] - The country's risk index has reached its highest level since August 2024, hovering around 1500 basis points, indicating a lack of investor confidence [2] Group 3 - Following political setbacks for President Milei, the Argentine bonds, stocks, and currency have all experienced significant declines, with the peso dropping 9% in the past two weeks [2] - Economists estimate that the government would need $9.75 billion to maintain the current exchange rate until the elections, which may be too costly and could lead to changes in the exchange rate mechanism [2] - Continuous dollar sales could deplete foreign reserves, jeopardizing short-term debt repayments and potentially increasing bond issuance to cover funding gaps [2]