Is U.S. Treasury Secretary Scott Bessent panicking? On the morning of Oct. 21, he issued a frantic-sounding post on X, defending the unprecedented U.S. financial intervention into Argentina, a so-called stabilization program, which was supposed to calm the volatile markets, prevent the peso from collapsing, and allow President Javier Milei to make it to the Oct. 26 midterm elections with a semblance of control over the economy. Instead, against the backdrop of a global financial collapse, daily Treasury purchases of pesos estimated to be $400 million so far this week, a confirmed $20 billion currency swap with the Argentine Central Bank, and a promised additional $20 billion from private banks and sovereign wealth funds, have failed to stabilize anything. Worse, a major devaluation looms after Oct. 26.
Today the City of London’s daily Financial Times reported that the peso has fallen below the level it reached before the Treasury began to purchase pesos on Oct. 16. The peso plunged by almost 1% on Oct. 20, to a record low of 1,477 to the dollar, which places it at the bottom of the lower of the two-band floating exchange-rate system set up under the last IMF program, signed in April of this year.
