Argentina\u2019s peso continues to sell off despite a U.S. rescue package, ahead of a key election that could trigger another steep bout of depreciation.<\/p>\n
On Friday, the currency slipped 0.4% <\/a>against the U.S. dollar, which now trades at nearly 1,492 pesos. The exchange rate has already hit a record low and is below its level before the Trump administration announced a $20 billion currency swap<\/a> agreement.<\/p>\n While news of that lifeline briefly triggered a sharp rally earlier this month, the peso has since given up those gains and has tumbled by more than 40% against the greenback so far this year.<\/p>\n That\u2019s despite Argentine President Javier Milei\u2019s efforts to secure an IMF rescue and defend the peso by draining the country\u2019s foreign-exchange reserves.<\/p>\n The financial turmoil comes as voters have become disillusioned with Milei\u2019s libertarian economic program, which has drawn praise from Trump and other Republicans. While he has made major progress <\/a>in curbing deficits and inflation, growth has slowed, and Argentina\u2019s so-called crawling peg to the dollar is seen as unsustainable.<\/p>\n Recent regional elections dealt Milei a major defeat, raising odds that he will devalue the peso. And congressional elections this Sunday are expected to further go against his party, putting additional pressure on the currency.<\/p>\n Trump has defended his rescue amid growing pushback from supporters who say it doesn\u2019t align with his \u201cMake America Great Again\u201d agenda.<\/p>\n \u201cThey have no money, they have no anything, they\u2019re fighting so hard to survive,\u201d Trump told reporters aboard Air Force One last weekend.<\/p>\n Treasury Secretary Scott Bessent has defended aid to Argentina as necessary to prevent a \u201cfailed state\u201d and called the currency swap line \u201ca bridge to a better economic future for Argentina, not a bailout.\u201d<\/p>\n But U.S. intervention has so far failed to arrest the peso\u2019s slide to fresh record lows, even as market participants have reportedly seen signs that the Treasury Department is selling hundreds of millions of dollars<\/a> to prop it up.<\/p>\n Wall Street has taken a dim view of Argentina\u2019s prospects and the Trump administration\u2019s ability to keep Milei\u2019s economic reforms on track.<\/p>\n Joseph Brusuelas, chief economist at RSM, said in a blog post on Wednesday<\/a> that the currency intervention has failed and predicted a 15%-30% plunge for the peso is highly likely if voters reject Milei again.<\/p>\n