Following his government's resounding loss in local elections - seen as a harbinger of next month's congressional races - Argentine President Milei is facing a renewed crisis as the embattled South American country's currency is collapsing amid fears that he will scrap his defense of the peso (which has already cost hundreds of millions of dollars) and let it plunge as so many of his predecessors have done.

"The market," Milei said when collared by a local journalist for a brief interview late Friday, is "in panic mode."

In a desperate attempt to satisfy demand for hard currency and prevent the peso from cratering, the three-day intervention figure rose to $1.1 billion, a staggering amount in a country that, by economists' best estimates, has less than $20 billion in liquid foreign reserves.

As Bloomberg reports, on Friday, he vowed to defend the peso at all costs, echoing the words of his top economic aide the day before.

 "We will do everything we must do to protect the quality of life of Argentines."

Milei is "spending currency reserves at a frenzied pace to prop up the peso that is in free fall," Derek Holt, vice-president and head of capital markets economics at Scotiabank, wrote in a note.

"Fixing at this exchange rate would risk returning the country to rampant hyperinflation which Milei promised to end. The very essence of his reforms are in jeopardy and with that the unfortunate hopes of Argentinians too used to policy failures."

Longtime Argentine observers see few options for Milei to stem the tide and regain confidence.

A strong showing in the Oct. 26 vote would be one. A fresh injection of cash from the International Monetary Fund or some other foreign aid agency would be another. Having just cut a $20 billion IMF deal in April, that may be unlikely though Milei intimated, after being asked Friday about financial aid from the US Treasury, that something may be in the works with some overseas institution.

Argentina bonds and stocks are also tumbling as investors are pulling money out of the country at a rapidly increasing clip.