❓WHAT HAPPENED: Argentine President Javier Milei’s government teeters on the brink as his country faces a significant currency crisis, kicked off by several major corruption scandals and a flight of investors from the Argentine peso—despite a $20 billion U.S. rescue package.

👤WHO WAS INVOLVED: Javier Milei, U.S. President Donald J. Trump, and U.S. Treasury Secretary Scott Bessent.

📍WHEN & WHERE: The currency crisis has ravaged Argentina for over a month, with new meaures announced by Bessent on Thursday, October 9, 2025.

💬KEY QUOTE: “The [U.S. Treasury] has concluded 4 days of intensive meetings with [Argentina’s Economic Minister Luis Caputo] and his team in DC. We discussed Argentina’s strong economic fundamentals, including structural changes already underway that will generate significant dollar-denominated exports and foreign exchange reserves.” — Secretary Bessent.

🎯IMPACT: A possible Argentine peso devaluation would likely set off a new inflation crisis, threatening to derail Milei’s government. Critical midterm elections will take place on October 26, 2025, with leftist parties working to retake control from Milei’s party, La Libertad Avanza.

Argentine President Javier Milei‘s government teeters on the brink as his country faces a significant currency crisis, kicked off by several major corruption scandals and a flight of investors from the Argentine peso. On Wednesday, short-term interest rates in the South American country surged to over 80 percent, worsening the peso crisis.

In late September, U.S. President Donald J. Trump authorized a $20 billion bailout for Argentina, overseen by U.S. Treasury Secretary Scott Bessent. However, with the peso crisis deepening, Bessent revealed that Treasury Department staff are intervening far more in the Argentine economy than previously thought.

“The [U.S. Treasury] has concluded 4 days of intensive meetings with [Argentina’s Economic Minister Luis Caputo] and his team in DC. We discussed Argentina’s strong economic fundamentals, including structural changes already underway that will generate significant dollar-denominated exports and foreign exchange reserves,” Bessent wrote in a post on X (formerly Twitter). He continued: “Argentina faces a moment of acute illiquidity. The international community—including [The International Monetary Fund (IMF)]—is unified behind Argentina and its prudent fiscal strategy, but only the United States can act swiftly. And act we will.”

“Additionally, we have finalized a $20 billion currency swap framework with Argentina’s central bank. The U.S. Treasury is prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets,” Bessent added, referring to the $20 billion rescue package first revealed in September.

However, thus far, President Milei’s efforts to bring the crisis under control appear to be having little effect in heading off a potential devaluation. In recent weeks, Milei has reinstated some foreign exchange controls and authorized the selling of dollars in the futures market. However, many financial analysts now believe the peso’s current exchange rate is unsustainable.

A peso devaluation would likely set off a new inflation crisis, threatening to derail Milei’s government. Critical midterm elections will take place on October 26, 2025, with leftist parties working to retake control from Milei’s party, La Libertad Avanza.

While Milei has largely been successful in reining in the out-of-control inflation experienced under the country’s previous socialist governments, dropping from a peak of around 300 percent to just 33 percent in October 2025, the austerity measures enacted have kept the poverty rate elevated. In the first half of 2023, Argentina’s poverty rate sat at around 40 percent. That jumped to nearly 53 percent in the first half of 2024 before falling back to around 40 percent in the second half of the year.

The currency crisis and a renewed inflation crisis could send poverty soaring once again.

Image by Gage Skidmore.

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