U.S. Launches $20 Billion Lifeline for Argentina
- Buster Wurm
- Oct 14
- 2 min read
The United States has stepped into Argentina’s deepening financial crisis with a bold rescue package, deploying $20 billion in financing and a rare direct purchase of pesos to shore up the country’s currency and support President Javier Milei’s sweeping economic overhaul.
Treasury Secretary Scott Bessent confirmed that Washington finalized a currency-swap framework with Argentina’s central bank, effectively a credit line backed by pesos, and that the U.S. Treasury itself intervened in foreign-exchange markets to stabilize the peso after weeks of sharp declines.
The move represents a major geopolitical and economic gamble. It marks one of the few times the U.S. government has directly intervened in another nation’s currency since 1990s Mexico rescue, and it underscores Washington’s intent to keep a politically aligned government in Buenos Aires afloat. President Donald Trump and Bessent have framed the effort as an “exceptional measure” aimed at preventing instability from spreading through emerging markets.
For Argentina, the intervention provides breathing room as Milei battles soaring unemployment and slowing growth after months of austerity. His reforms, from deep spending cuts to monetary tightening, have slashed inflation from nearly 26% to 1.9% since he took office, though at the cost of rising public anger and electoral risk ahead of the October 26 midterms .
Market reaction was immediate: the peso rebounded 0.7% against the dollar and Argentine bonds rallied. At the same time, analysts called the swap “a powerful measure” that may curb demand for dollars and stave off a currency run.
Globally, the U.S. move signals a willingness to wield financial diplomacy as a stabilization tool amid volatile emerging markets. Yet critics warn that taxpayers now share exposure to one of the world’s most fragile economies, highlighting both the promise, and peril, of using U.S. capital to defend market confidence far beyond its borders.
Sources:
Comments