Patrick Boyle On Finance The Chainsaw Stalls: Can Milei Cut Through Argentina’s Currency Collapse?
Oct 12, 2025
Argentina faces a severe currency crisis with President Milei attempting drastic reforms. Discover how the U.S. Treasury's unprecedented purchase of pesos impacts the economy. Explore the political risks tied to upcoming midterms and the backlash against Milei's agenda. Delve into the controversy over the peso's valuation and the geopolitical stakes involving China and agricultural exports. Can Milei's chainsaw reforms survive, or has the momentum stalled?
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US Steps In With Rare ESF Intervention
- Argentina's peso faced intense selling that forced rapid Treasury interventions and reserve use.
- The US ESF directly bought pesos, an unusually rare move showing high strategic priority.
Chainsaw Reforms Revive Housing Market
- Javier Milei arrived with a literal chainsaw and a radical reform agenda to cut Peronist interventionism.
- He quickly balanced the budget and dramatically reduced inflation, reviving mortgages and housing listings.
Strong Peso Tradeoff: Lower Inflation, Higher Risk
- Milei's strong-peso policy helped cut inflation but created distortions by encouraging imports and draining reserves.
- The policy's success on inflation came at the cost of competitiveness and foreign-exchange depletion.