The obscure pool of money the US used to bail out Argentina

Planet Money

NPR

Business, News

4.6 • 29.8K Ratings

🗓️ 15 November 2025

⏱️ 29 minutes

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Summary

Last month, during the longest government shutdown in U.S. history, Treasury Secretary Scott Bessent announced that the United States had offered to functionally loan Argentina $20 billion. Despite the sums involved, this bailout required no authorization from Congress, because of the loan’s source: an obscure pool of money called the Exchange Stabilization Fund. The ESF is essentially the Treasury Department’s private slush fund.

Its history goes all the way back to the Great Depression. But, in the 90 years since its creation, it has only been used one time at this scale to bailout an emerging economy: Mexico, in 1995. That case study contains some helpful lessons that can be used to make sense of Bessent’s recent move. Will this new credit line to Argentina work out as well as it did the last time we tried it? Or will Argentina’s economic troubles hamstring the Exchange Stabilization Fund forever?

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This episode was hosted by Keith Romer and Erika Beras. It was produced by Luis Gallo. It was edited by Eric Mennel and fact checked by Sierra Juarez. It was engineered by Cena Loffredo. Alex Goldmark is Planet Money’s executive producer.

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Transcript

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0:00.0	This is Planet Money from NPR.
0:06.3	The federal government shutdown that just ended went about a month and a half.
0:11.3	Hundreds of thousands of federal workers were put on furlough.
0:14.6	Flights were being canceled because of a shortage of air traffic controllers.
0:18.7	People didn't get their food stamps.
0:21.7	But last month, despite most federal spending being paused, Treasury Secretary Scott Bessent,
0:27.7	announced that the United States did have $20 billion for Argentina to help that country
0:35.2	through an economic rough patch.
0:40.0	We should say he is totally allowed to do this.
0:41.8	No congressional input required.
0:45.8	The reason Bessent can just unilaterally make this move is this.
0:52.8	For the last 90 years, the U.S. Department of the Treasury has had this kind of private slush fund with billions of dollars in it.
0:55.7	It is called the Exchange Stabilization Fund.
1:02.1	And mostly, it just sits there. But Bessens announced on social media that he was putting it in action.
1:10.8	In what we used to call a tweet, now I guess a post, Bessent explained that the U.S. Treasury had started using the fund to buy up Argentine pesos, and that the United States stood ready to swap 20 billion more U.S.
1:17.4	dollars for its equivalent in pesos.
1:19.9	What was your reaction to that?
1:23.9	Bold move, Mr. Treasury Secretary.
1:27.1	Bold move. That is Brad Setzer. Treasury Secretary. Bold move.
1:28.8	That is Brad Setser.
1:30.4	He's a senior fellow at the Council on Foreign Relations and kind of the go-to expert on international financial flows.
1:37.8	Brad says part of what makes the move so bold is that this swap of dollars for pesos amounts to basically a loan of billions and billions of dollars.
	...

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