I don't think I've ever heard of a country doing anything like this for another country?
Nothing to see here.
They've got plenty.
Plus they'll print more.
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.
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).
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?
Jtsummers•2h ago