On Point with Meghna Chakrabarti The real reason for the U.S.-Argentina bailout
Nov 12, 2025
Monica DeBoll, a Senior Fellow at the Peterson Institute for International Economics, and Natalie Alcoba, an Argentine-Canadian journalist, delve into the complex U.S.-Argentina $20 billion bailout. They explore Argentina's dual-currency system, highlighting its role in economic crises. DeBoll explains the political shocks that led to the recent peso plunge, while Alcoba shares insights on local sentiment and inflation. The discussion also touches on the geopolitical implications of U.S. support and the challenges of dollarization as a solution.
AI Snips
Chapters
Transcript
Episode notes
Two-Currency Trap
- Argentina functions with two currencies: the peso and widespread use of the U.S. dollar.
- This dual-currency system amplifies shocks and makes the economy vulnerable to sentiment and external flows.
Political Shock Meets Weak Growth
- Political turmoil plus weak growth and high unemployment caused a roughly 20% peso decline.
- Market impatience and political events amplified currency weakness despite some anti-inflation reforms.
How The Swap Line Works
- A currency swap line means the U.S. buys pesos in exchange for dollars to stabilize Argentina.
- Monitor usage: the Treasury had used only about $1–1.5 billion of the $20 billion swap at that time.