Argentina is facing an economic crisis, with its currency, peso, under pressure. The US government has intervened, promising to support the country financially if needed. Treasury Secretary Scott Bessent said the US stands ready to stabilize the economy and has options to do so. This move comes after a series of losses for Argentina’s libertarian president, Javier Milei, who is facing mounting pressure from his sister’s corruption scandal. The US backing may give Argentina the firepower it needs to calm its currency markets, but the country’s financial woes are far from over.
The peso has been floating within an exchange-rate band since April, when the IMF launched another program in Argentina. However, this move was made without sufficient foreign reserves. The US Treasury is now looking at several options to stabilize the currency, including swap lines and direct currency purchases. Markets reacted positively to Bessent’s statement, with bonds and stocks rising.
However, experts warn that buying time may not be enough. A poor showing in mid-term elections could fuel investor alarm and put pressure on the peso. The country’s reform program relies heavily on a strong peso to contain inflation, and investors are worried about Mr Milei’s ability to manage his government’s interventions.
Source: https://www.economist.com/the-americas/2025/09/22/argentinas-finances-just-got-even-more-surreal