Argentina’s political and financial turbulence deepened after Javier Milei’s party suffered a heavy defeat to the Peronist opposition in key local elections. The peso tumbled to a historic low, sliding nearly 5 percent against the US dollar, while stocks and international bonds plunged sharply, sparking concerns over Argentina’s economic stability. Milei’s reform agenda, once hailed as a potential turning point, now faces major obstacles as midterm elections loom on 26 October. Markets fear the government may burn through reserves to defend the peso, undermining its IMF-backed programme and raising the risk of default. The Peronists’ wider-than-expected 13-point victory in Buenos Aires province highlighted Milei’s growing political challenges.  These are compounded by corruption allegations involving his sister. Investor confidence, already shaken, has deteriorated further, with bonds and equities suffering their steepest losses since Argentina’s 2020 restructuring.