Argentina faces a market run on its peso

U.S. Talking With Argentina About $20 Billion in Aid

Establishing a swap line with Argentina or lending to it would effectively mean supplying dollars that the country could use to buy pesos, thereby strengthening the currency.

The Treasury’s announcement will provide Milei “some breathing space” to contain pressure on the peso before the Oct. 26 congressional election, said Kimberley Sperrfechter, a Latin America economist at Capital Economics.

But Sperrfechter said the U.S. support won’t solve Argentina’s broader economic problems, including what she says is Milei’s unsustainable currency policy that has created an overly strong peso.

https://www.wsj.com/world/americas/bessent-says-u-s-talking-with-argentina-about-20-billion-in-aid-0a821d79


Mr Milei’s problems are not due solely to political misfortune, though. His reform programme has relied heavily on a strong peso to contain inflation. 

The classic example is sterling’s Black Wednesday exit from the European exchange rate mechanism in 1992.

One of those traders was Scott Bessent, then employed by the hedge fund manager George Soros and now the US Treasury secretary.

https://englundmacro.blogspot.com/2025/09/argentinas-finances-just-got-even-more.html


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