Marketplace All-in-One Why is Trump throwing money at the Argentine peso?
Oct 22, 2025
Joining the discussion are Sabri Beneshore, a Marketplace reporter specializing in foreign exchange, and Mariana Mazzucato, a renowned economist and director at UCL. They explore why the U.S. is investing $20 billion in Argentine pesos to counter inflation before the election of ally Javier Milei. Delve into the mechanics of currency swaps, the risks associated with lending to Argentina, and the implications of U.S. state capitalism. Mazzucato also highlights the importance of government equity in fostering innovation and ensuring long-term economic competitiveness.
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U.S. Currency Swap To Support The Peso
- The U.S. is buying Argentine pesos to prop up the peso and limit inflation ahead of elections.
- Treasury swaps give Argentina dollars to buy pesos, but repayment and currency risk remain significant.
Peso Collapse Raises Inflation And Political Stakes
- A collapsing peso raises import prices and pushes Argentine inflation higher, affecting voters and elections.
- Buying pesos can raise their price temporarily, but markets may see through short-term U.S. intervention.
Repayment Risk From Argentina's Defaults
- Holding large amounts of pesos exposes the U.S. to repayment and valuation risk if Argentina defaults.
- Argentina's repeated defaults make the swap a risky financial and political bet for the U.S.
