[HN Gopher] US Treasury Sells Dollars to Keep Peso Within Argent...
___________________________________________________________________
US Treasury Sells Dollars to Keep Peso Within Argentina FX Band
Author : zerosizedweasle
Score : 25 points
Date : 2025-10-21 19:22 UTC (3 hours ago)
(HTM) web link (www.bloomberg.com)
(TXT) w3m dump (www.bloomberg.com)
| Jtsummers wrote:
| https://archive.is/csR4m
| lawlessone wrote:
| Devaluing your currency to help another country?
|
| I don't think I've ever heard of a country doing anything like
| this for another country?
| ninininino wrote:
| It works well when you already want to devalue your currency to
| improve the competitiveness of your exports (impact on non-
| diversified consumer's purchasing power and wealth debasement
| be damned)
| fuzzfactor wrote:
| >US Treasury Sells Dollars
|
| Nothing to see here.
|
| They've got plenty.
|
| Plus they'll print more.
| rchaud wrote:
| $20 billion isn't going to make a dent in the value of the
| USD. Buying pesos doesn't make the dollar any cheaper for
| major trading partners like Canada, China or the EU. This is
| a bailout of Argentina's collapsing currency peg instituted
| by its "free market libertarian" government.
| londons_explore wrote:
| It's literally a loan to Argentina to support the friendly
| government there and the US's existing interests in pesos.
|
| If we didn't do it, the peso would probably hyperinflate
| again and all our investments denominated in pesos would
| become worthless.
|
| If we do do it, we get back all our money as long as the
| currency doesn't collapse in the future.
| Fade_Dance wrote:
| FX necessarily trades in pairs. To buy a peso one needs to sell
| something against it, and the US will sell dollars if acting in
| the FX space.
|
| Since the USD is one of the core currency crosses and is at the
| base layer of the financial system, raising the peso/dollar
| cross is effectively strengthening the currency against all
| other currencies.
|
| Also, while the specific political circumstances around the
| pesos swap line are dubious, the US often extends dollar swap
| lines to other central banks. The other side of the privilege
| of having the world reserve currency is having the obligation
| to support the stability of the world financial system
| (although this example is more off the wall than the typical
| example).
| bigbadfeline wrote:
| > raising the peso/dollar cross is effectively strengthening
| the currency against all other currencies.
|
| If the peso rises against all other currencies, the dollar
| paying for it must fall against them, not as much but _the
| dollar falls_ - at least relative to the movement it would
| experience without the purchase of pesos.
|
| > Since the USD is one of the core currency crosses and is at
| the base layer of the financial system,
|
| Abracadabra isn't an argument.
| vocram wrote:
| Switzerland did that for a few years in 2011, not to help
| another country but to avoid CHF overvaluation.
| lawlessone wrote:
| Yes, and China allegedly does similar, but in both cases it's
| to help themselves.
| throw03172019 wrote:
| Does Argentina have a non-redacted version of the Epstein files
| or something?
| slaw wrote:
| It is even worse. Argentina can ask China for help.
| igor47 wrote:
| There's no way the administration in power thinks that's
| worse.
| trallnag wrote:
| Billions of dollars in development aid to Africa good, billions
| of dollars in development aid to Argentine bad?
| amanaplanacanal wrote:
| Is propping up a failing currency normally considered
| "development aid"?
| whycome wrote:
| Ally for future war w/ venezuela?
| erentz wrote:
| > Treasury's efforts to shore up Argentina's currency are part of
| a broader effort by Secretary Scott Bessent to stabilize the
| South American economy before President Javier Milei's party
| faces midterm elections Sunday
|
| Things like this used to be the job of the IMF, stepping in when
| there were genuine crisis, in theory with experts advising or
| demanding policy changes to prevent further crisis.
|
| But it seems the crisis here is all self inflicted and the bail
| out is politically motivated. Is the expectation that after
| Sunday this won't be needed and things will stabilized or is this
| structural and we'll be on the hook holding the Peso's peg
| forever?
| cyanydeez wrote:
| Yes, before one party plus it's rich owners realized they
| deserve accolades and further political power for helping
| fellow fascists and isolationists.
|
| If you're not a fascists or isolationist, you're an enemy of
| the current political zeitgeist.
| ChrisArchitect wrote:
| Related:
|
| _Argentine peso weakens to fresh low despite US interventions_
|
| https://news.ycombinator.com/item?id=45651516
|
| _U.S. Banks Are Hunting for Collateral to Back $20B Argentina
| Bailout_
|
| https://news.ycombinator.com/item?id=45651516
| Havoc wrote:
| Is the US having a stroke?
| ahurmazda wrote:
| This was on nytimes just a few days ago. Quoting the bits that
| might be relevant[1]. A lot more in tfa
|
| > Those efforts have been complicated by the fact that major
| hedge funds, including those led by friends of Mr. Bessent, stand
| to benefit financially from an Argentina economic lifeline. Funds
| at investment firms including BlackRock, Fidelity and Pimco are
| heavily invested in Argentina, as are investors such as Stanley
| Druckenmiller and Robert Citrone, both of whom worked with Mr.
| Bessent when he was an investor for George Soros.
|
| 1. https://archive.ph/6bWMv
___________________________________________________________________
(page generated 2025-10-21 23:01 UTC)