Fri, 31 Oct 2025

Fri, 31 Oct 2025 The US bet big with Argentina bailout - is it paying off?

US Treasury Secretary Scott Bessent has called the Argentine peso "undervalued". But not many people agree.
US Treasury Secretary Scott Bessent has taken on the role of stabilizing Argentina's economy, after President Donald Trump intervened to support his ally President Javier Milei ahead of midterm elections. The US government provided a $20bn currency swap line and purchased pesos to prevent a plunge in the peso's value. The move was seen as a success for Milei's party, which fended off losses and made gains in the election. However, the intervention has raised questions about its financial viability. The peso has fallen by around 30% this year, despite US support, and many analysts believe it is still overvalued. Argentina's central bank has been forced to spend billions buying up pesos to keep the currency steady, which economists say is unsustainable in the long term. Economists predict that Argentina will need to change its policy and allow the peso to fall, or risk needing another bailout. This presents a dilemma for Bessent, who promised there would be "no taxpayer losses" from the US intervention. The US has made limited investments of around $2bn in pesos, but analysts are skeptical about the potential returns. Some critics have accused Bessent of trying to protect finance "buddies" with investments in Argentina. The outcome is still uncertain, and economists predict that the peso will likely continue to fall before recovering.
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