Argentine peso weakens to fresh low despite US interventions
55 comments
·October 21, 2025sailfast
mmooss
And putting in your money in the first place tells the world that things are pretty bad. Also, because the US government right now strongly embraces being highly flexible, able to change its mind in a moment, longer-term support is not reliable.
programmertote
What's the benefit for trump and co. helping out Argentina (other than helping a kindred spirit, the current Argentinian president)? I really can't see any benefit for the US in this move. Hopefully, someone more versed in economics can explain what the missing angle is, if any.
nradov
I'm not convinced this bailout is good policy but you could maybe make a case that it's the least bad option. If the USA doesn't help Argentina then the lender of last resort becomes China. Do we want China to gain more control and influence in the Americas?
https://sccei.fsi.stanford.edu/china-briefs/chinas-overseas-...
estearum
The US is not the global or continental lender of last resort. The IMF traditionally holds that role and it appears to be at its limit with regard to Argentina due to serial defaulting, political instability, corruption, and overall lack of credibility.
Not compelling at all to say the US just generally has an imperative to buy debt or lend to countries whenever they're least creditable just because China might do it anyway.
nradov
Well that was my point. Argentina probably can't borrow any more from the IMF so that leaves the USA or China. China might do it for political reasons even if they lose money so we need to consider whether we're willing to accept the negative geopolitical consequences of that.
mrcwinn
I don't know, it sounds pretty compelling to me.
donavanm
Its intervening to save a democratic and aligned country from yet-another economic collapse and political crises at their upcoming national elections. Not dissimilar to what the us did for mexico during the peso crisis and revaluation in the 90s.
I dont know why “bail out” is the headline term, it’s closer to a “currency backstop” AFAIK. The us is effectively extending hard dollars in exchange for pesos, allowing the argentine govt to not be destroyed in the open currency markets. If this works the peso would retain (or gain) value as the country recovers (economically, due to the ongoing reforms) and the us could feasibly even profit.
On the USD and peso backstop its important to note that “dollarization” was a big talking point for milei. But argentina never had anywhere close to enough USD reserves or even USD economic flows to make that at all feasible ever. Like many many billions away from plausible. So there was a background theme of trying to catch them out on that as well since the last elections.
Edit: and for context the current run against the peso is effectively because of dumb milei posturing ahead of regional elections, and a strong populist/peronist result. Lots of fear that if its repeated at the upcoming national elections then argentina goes back to kirchner style populism and debt/economic blow up.
coliveira
The only people who will benefit from this are the financial elite in Argentina who are selling pesos and getting dollars as quickly as they can, and the hedge funds who invested in Argentina and need a way out. The current government, which is a bad joke, will never win anything else. The economy will continue to go south because this plan doesn't work even in the short term.
donavanm
I personally think milei the politician is a clown. And many of his statements are just offensive to anyone who can spark two braincells together. I also thought he was going to burn it all down in a blaze of hubris after his election.
But its hard to argue with arresting the inflation, gdp, and budget surplus numbers. Im not sure how the economy is “going south.” Generously the policies have arrested the slide?
I dont imagine the typical argentine is better off with 200% inflation, 50% unemployment, and a 57% poverty rate. Avoiding that return seems to be quite a benefit for just about everyone?
lezojeda
[dead]
jordanb
Argentina wouldn't be "destroyed" by a currency devaluation. But Milei wants to keep the Peso strong so his upper/middle class supporters can keep buying electronics and going on international vacations.. at least until the next election.
null
durandal1
Normal productive people doing normal stuff reframed through the lens of pettiness and jealousy.
clipsy
> I dont know why “bail out” is the headline term, it’s closer to a “currency backstop” AFAIK. The us is effectively extending hard dollars in exchange for pesos, allowing the argentine govt to not be destroyed in the open currency markets. If this works the peso would retain (or gain) value as the country recovers (economically, due to the ongoing reforms) and the us could feasibly even profit.
If.
8note
couldn't the US do better by buying the pesos after the crash, and then when the argentine peso regains its value as part of recovery, the US gets a bigger profit?
nocoiner
No no no, you don’t get it, it’s not a “bailout,” it’s simply a “magic bean repurchase facility” whereby dollars are made available to holders of magic beans. When the magic beans sprout and reach the sky, the profit could be considerable.
WhereIsTheTruth
I'd guess it's because of its natural resources and "cheap" labor which is only getting cheaper, whether this was done intentionally or not, it seems to go hand in hand with CHIPS Act
https://www.csis.org/analysis/south-americas-lithium-triangl...
estearum
Scott Bessent is besties with Rob Citrone who is one of the largest purchasers of Argentine debt. He lobbied Bessent, Bessent said "Sure!"
Sometimes it really is that simple.
https://paulkrugman.substack.com/p/bailing-out-bessents-budd...
https://www.nytimes.com/2025/10/09/us/politics/argentina-bai...
https://www.motherjones.com/politics/2025/09/trump-argentina...
refurb
The claim that it was done to help his hedge fund buddies has no source.
treis
>So while millions of children must die to save a few billion dollars, taxpayers are on the hook for billions more to bail out Bessent’s hedge fund buddies in a predictably futile attempt to save the Elon Musk of the South.
It's a good thing he didn't give into hyperbole...
cobbal
Which part of that sentence do you think is hyperbole?
> Forecasting models predicted that the current steep funding cuts could result in more than 14,051,750 (uncertainty interval 8,475,990-19,662,191) additional all-age deaths, including 4,537,157 (3,124,796-5,910,791) in children younger than age 5 years, by 2030.
https://www.thelancet.com/journals/lancet/article/PIIS0140-6...
magicalist
The sources are linked right in line, so which part is hyperbole?
https://ph.ucla.edu/news-events/news/research-finds-more-14-...
martythemaniak
Talking about the naked, open corruption and bribery is considered gauche in polite society. Executing random Colombian fisherman, OTOH, is perfectly fine.
jauntywundrkind
The connection is very clear. Amazing Krugman piece. There's still a little bit of a why question to me? What will Citrone or anyone else ever be able to provide back, since they all know this is going to fail, & are using this loan to jack up prices & exit their positions?
Maybe there's some more elaborate way this will enrich certain American cronies. Maybe.
But I tend to think the answer comes if we look back 80 years. A lot of bad evil people needed a friendly state to run to after WWII ended. Today, beyond just being friends-of-an-(evil-doing)-feather together with some other exploitative public-services-destroying extremists, part of me thinks, maybe perhaps: Argentina is being set up as a new exit, a new place to flee too, when justice comes a calling.
rubyn00bie
From the Mother Jones article:
> Citrone, the co-founder of Discovery Capital Management, is also a friend and former colleague of Bessent—a fact that has not been previously reported in US media outlets. Citrone, by his own account, helped make Bessent very wealthy.
I think it's simply that Bessent can give his buddy (Citrone), who made him (Bessent) "very wealthy," a bailout at zero cost to any of them. $20 billion is really insignificant for the US government, even if a gross waste of tax dollars, and they know there's not going to be a single repercussion.
> Argentina is being set up as a new exit, a new place to flee too, when justice comes a calling.
I too have been thinking that lately. It wouldn't be ideal for any of them but, from their perspectives, it surely would be better than the alternative.
watwut
Billionaire friends of mister Besset need that bailout, cause they invested into Argentina. They need out.
That is it.
vkou
1. Every dollar that he can spend on whatever he wants without congressional permission is another nail in the legal theory of 'The president is an unaccountable god-king.'
2. What kind of god-king wouldn't reward his friends and allies?
denkmoon
Trump views Milei as a buddy, it's that simple. The personal angle is more important than you might think. Plenty of insiders have discussed this aspect of Trump's foreign policy, most recently I watched this podcast with John Bolton talking about it https://www.youtube.com/watch?v=T_BB-96D6qg
nashashmi
This is the first attempt at aligning the world to a Trump World Order and away from the New world order started by Eisenhower.
morninglight
Maybe he needs a new, low cost supplier?
The intervention doesn't work very well if just after you put in your money, you broadcast to the world via your social media website that Argentina is DYING.