Argentina’s ongoing economic saga has taken a dramatic new turn, as the United States stepped in with a $20 billion currency swap deal aimed at stabilizing the South American nation’s crumbling financial system. The move, announced on October 9, 2025, by US Treasury Secretary Scott Bessent, comes after months of turmoil that have seen the Argentine peso in free fall, the stock market plunging, and investor confidence evaporating at a dizzying pace.
For observers of Argentina’s turbulent history, the present crisis is hauntingly familiar. As reported by The Financial Times and The Economist, the country teeters on the brink of bankruptcy yet again, surviving only on the hope of foreign intervention. But this time, the drama is unfolding under the stewardship of President Javier Milei, a self-styled “anarcho-capitalist” who swept into office nearly two years ago promising to “chainsaw” the state into prosperity. Instead, critics say, he has left Argentina battered and bleeding, both economically and politically.
The immediate trigger for this latest meltdown was political: Milei’s Liberty Advances party suffered a stinging defeat in Buenos Aires province, the country’s economic and political epicenter. Bloomberg called it “a big disappointing surprise for investors,” while Al Jazeera described it as a “crushing setback.” The loss not only rattled markets but also exposed Milei’s waning domestic legitimacy and his inability to deliver on the radical economic experiment that once drew praise from Western conservatives and libertarians.
Compounding the political fallout, Milei’s administration has become entangled in a web of corruption scandals. His sister and chief of staff, Karina Milei—whom he has referred to as “the boss”—was implicated in August in murky dealings with pharmaceutical companies, sparking violent protests in the streets. According to Cryptopolitan, Milei himself was investigated for his alleged involvement in a $250 million cryptocurrency “pump-and-dump” scheme, though the anti-corruption office ultimately cleared his name in February. The scandals didn’t stop there: on October 5, his close ally José Luis Espert withdrew from elections after admitting to receiving a $200,000 payment from an alleged drug trafficker, further tarnishing the administration’s reputation.
With the peso weakening beyond 1,400 per US dollar in early October—edging toward its record low of 1,475 reached just weeks earlier—Argentina’s central bank has been burning through its reserves in a desperate bid to contain the currency’s slide. Inflation remains among the highest in the world, now exceeding 150% annually, and real wages are collapsing. According to TradingEconomics, half of all employed Argentinians now fear losing their jobs, while the cost of living has soared to make Argentina one of Latin America’s most expensive countries—a bitter irony for a nation that was once among the region’s wealthiest.
Amid mounting financial chaos, Milei’s government began to plead openly for foreign aid, not just from the International Monetary Fund but directly from Washington. The Biden administration, and later the Trump-aligned faction seeking to reclaim influence, both entertained the idea of a massive bailout. As revealed by The Financial Times, discussions centered on a $20 billion “swap line” for Argentina’s central bank and “standby credit” facilities—measures designed to disguise what would effectively be a US-financed rescue.
On October 9, after four days of intense talks in Buenos Aires, Treasury Secretary Scott Bessent confirmed the deal. “The US Treasury is prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets,” Bessent said in a statement on X. He explained that the swap would give Argentina immediate access to US dollars in exchange for pesos, with the two central banks trading currencies temporarily to help Buenos Aires defend its exchange rate and meet short-term liquidity needs. The operation is being executed through an Exchange Stabilization Fund that Bessent directly oversees, and he admitted that if the peso’s value weakens during the swap period, it could expose the US to losses.
Bessent emphasized the Trump administration’s commitment to supporting allies, stating, “I continue to hear from American business leaders who, thanks to President Milei’s leadership, are eager to tie the American and Argentine economies more closely together.” He also praised Buenos Aires for its “sound fiscal discipline” and commitment to lower taxes, higher private investment, and job creation. The swap’s maturity period was not disclosed, but officials indicated it would be reviewed quarterly in coordination with the IMF and Argentina’s finance ministry.
The US intervention arrives at a moment when markets are openly questioning Milei’s staying power and the sustainability of his reforms. His “chainsaw” approach—slashing government spending in hopes of exterminating inflation—initially won him support among voters weary of decades of mismanagement. But the momentum behind Milei’s libertarian revolution has faltered. Protests have erupted across the country, involving students, unions, and even the medical community, as the administration’s budget cuts have threatened universities and pediatric hospitals. Just weeks ago, Argentina’s Senate voted to block Milei’s latest attempts to slash funding for these vital institutions, a clear sign that elite support for his coalition is crumbling.
Argentina’s relationship with the US has only deepened since Milei rejected the country’s invitation to join the BRICS bloc in late 2023, choosing instead to align with Washington and Israel. That move delighted US policymakers but stunned regional partners, who saw BRICS membership as a pathway to new markets and independence from Western financial constraints. Instead, Argentina has found itself more dependent than ever on American goodwill—an irony not lost on critics of Milei’s “free market” vision.
The symbolism of Milei’s relationship with Trump is hard to ignore. During the United Nations General Assembly in September, Milei appeared deferential to the former US president, who endorsed Milei’s re-election bid and praised his “fantastic job,” while publicly downplaying the need for a bailout. Behind the scenes, however, Trump’s Treasury Secretary Bessent was quietly laying the groundwork for the very financial support Trump claimed was unnecessary. The two leaders are scheduled to meet again in Washington on October 14 to discuss further economic cooperation.
The broader implications of Argentina’s crisis extend far beyond its borders. As Washington’s intervention highlights the limits of US-centric neoliberalism, emerging powers like the BRICS nations continue to offer alternative models of economic cooperation. Meanwhile, the dollar’s dominance—and Washington’s willingness to wield it as an instrument of policy—has driven more countries to seek independence from Western financial systems.
For Argentina, the lesson is stark. The “chainsaw revolution” that promised to restore sovereignty and prosperity has instead deepened dependency and inequality. As the country stares into the abyss once more, the path forward will require not just foreign aid, but a fundamental rethinking of economic priorities—one that puts the needs of ordinary Argentinians ahead of ideological dogma or geopolitical alignment.
