In a dramatic move aimed at stabilizing both Argentina’s battered economy and the wider global financial system, the United States Treasury announced on October 13, 2025, a $20 billion currency swap line with Argentina’s central bank. The deal, unveiled by Treasury Secretary Scott Bessent, is intended to serve as a financial lifeline for President Javier Milei’s embattled administration just weeks before Argentina’s crucial parliamentary elections on October 26.
The funds, which will be drawn from the seldom-used Exchange Stabilization Fund, bypass Congressional approval—a decision supported by President Trump. As reported by Fortune, this marks a rare and significant intervention, the first of its kind since the U.S. rescued Mexico in 1995. The move is designed to address acute liquidity concerns, with the U.S. dollars being swapped for Argentina’s volatile pesos in an effort to calm markets and prevent capital flight.
Argentina’s economic woes are well documented. Since gaining independence, the country has lurched from one crisis to another: hyperinflation, banking collapses, debt defaults, and a currency that has steadily lost value. When Milei assumed office in December 2023, inflation was running at a staggering 211% per year, and the money supply was expanding at 130% annually. While inflation has since fallen, it remains alarmingly high at 33.6% per year, and the money supply is still growing at 67%—far above what economists consider sustainable for achieving modest inflation targets.
The peso’s decline has been relentless. Back in 2001, one peso bought a U.S. dollar. Now, it takes more than 1,421 pesos to get a single greenback. Mortgage interest rates have soared, with the average rate in September 2025 hitting 57.3%. The real, inflation-adjusted rate for peso loans is about 20%, compared to just 3% in the U.S., according to Fortune. These economic headwinds have battered investor confidence, especially after Milei’s party suffered a defeat in the recent elections, as highlighted by CNN.
Milei’s presidency has been marked by radical reforms: slashing public spending, deregulating markets, and reducing the number of civil servants. While these measures have curbed some excesses, they have not been enough to restore faith in the peso or the broader economy. Crucially, Milei has so far failed to deliver on his headline campaign promise—dollarizing the economy by scrapping the Banco Central de la República Argentina (BCRA) and replacing the peso with the U.S. dollar. Critics argue this failure is Milei’s Achilles’ heel, leaving the door open to further currency turmoil and capital flight.
The $20 billion U.S. package is structured with two main instruments: a currency swap with the BCRA and direct actions to allow local currency to be exchanged for dollars, thus maintaining market liquidity. The goal, according to the U.S. Treasury, is to ensure market stability and reduce the volatility of Argentina’s exchange rates. As CNN reported, the official line is that the aid is meant to prevent a domino effect in global finance, with the risk that Argentina’s instability could spill over into neighboring economies and unsettle global markets.
Yet, the move is not without controversy. Critics on both sides of the equator have questioned the political motives behind the bailout. Some see it as a bid by President Trump to bolster an ideological ally in Latin America—one who could serve as a bulwark against the so-called “pink tide” of left-leaning governments in the region and counter China’s growing influence. Others, especially in Washington, are wary of using billions in taxpayer dollars to support a foreign government at a time when the U.S. faces its own fiscal challenges. Rohit Chopra, director of the Consumer Financial Protection Bureau, didn’t mince words, stating, “While the government is 'shut down,' the Treasury Department officially started its bailout of Argentina. We are now actively pumping dollars into Argentina in exchange for the country's plummeting peso, rather than helping people here at home.”
Financial experts have also weighed in on the risks. Joseph Brusuelas, chief economist at RSM, told Fortune, “It’s entirely unclear to me that Argentina will not choose to devalue its peso after its election later this month. Therein lies one of the greater risks of providing $20 billion Treasury supported swap line to Buenos Aires.” The concern is that the U.S. funds may simply prop up the peso until the election, after which a major devaluation could occur, leading to further losses and undermining the credibility of American financial instruments abroad.
Still, some analysts argue the intervention was necessary. Diego Celedon, head of equity strategy for the region at JPMorgan Chase, called the move “a circuit breaker, halting the negative feedback loop that had threatened to deepen Argentina’s economic strain.” He added, “The U.S. support acts as a circuit breaker, halting the negative feedback loop that had threatened to deepen Argentina’s economic strain.” The immediate market reaction was mixed: while the peso appreciated sharply against the dollar, the Global X MSCI Argentina ETF—an exchange-traded fund pegged to the country’s industrial leaders—slumped, reflecting investor skepticism about the long-term impact of the bailout.
Argentina’s troubled relationship with the International Monetary Fund (IMF) adds another layer of complexity. Since joining the IMF in 1956, Argentina has entered into 23 separate programs and now owes the Fund a staggering $41.8 billion—over four times more than its next largest debtor, Ukraine. Yet, as Fortune pointed out, none of these IMF interventions have succeeded in curing Argentina’s chronic economic malaise.
The U.S. intervention also comes against a backdrop of shifting global alliances. Argentina has shown interest in deepening ties with China, which has already affected global trade dynamics—especially in agricultural markets. As CNN noted, China’s willingness to increase purchases of Argentine grain after the country reduced export taxes has already had ripple effects on world prices.
With the parliamentary elections looming, the outcome will be pivotal for the direction of Milei’s reforms and Argentina’s broader economic orientation. The U.S. administration, for its part, is betting that this financial shot in the arm will buy Milei enough time to implement further reforms and stabilize the economy. But as history has shown, Argentina’s path is rarely straightforward. The coming weeks will reveal whether this unprecedented intervention will mark a turning point—or simply another chapter in the country’s long saga of economic turbulence.
For now, the world is watching closely as Argentina stands at the crossroads, with both its future and that of the region hanging in the balance.