Part 5/11:
This dire situation underscored an ominous vicious cycle: declining approval ratings triggered market sell-offs, which further undermined economic stability and Milei’s political capital. The exchange rate plummeted, reaching about 1,500 pesos per dollar — a record low.
The US Intervention and Political Controversy
In late September, the United States provided a lifeline, offering a $20 billion swap line that allowed Argentina to convert pesos into dollars at a stable exchange rate. The initial hope was that this support would ease market fears ahead of the midterms. Ironically, the US’s intervention did little to halt the peso’s slide, and the peso continued to weaken, trading just over 1,300 to the dollar in unofficial markets.