US launches US$20 billion financial lifeline for Argentina, buys pesos in rare move
US helps prop up Argentina’s faltering finances, and boost political ally President Javier Milei for midterm elections
The United States rushed to stabilise Argentina’s economy on Thursday, offering US$20 billion in financing and carrying out a rare intervention in currency markets to prop up the peso after weeks of sharp declines.
Washington has finalised a US$20 billion currency swap framework with Argentina’s central bank, Treasury Secretary Scott Bessent said in a social media post. The US also directly purchased pesos, he said, a move that followed unsuccessful efforts by Argentine authorities to stabilise the exchange rate on their own.
Trump and Bessent were making a bet on a nation that has defaulted and devalued repeatedly over the past several decades. The goal was to help their political ally President Javier Milei notch a win in October 26 midterm elections, and calm markets unsettled by fears of his leftist rivals returning to power.
“The US Treasury is prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets,” Bessent said.
Milei welcomed the intervention, thanking Bessent and President Donald Trump in a post on X. “Together, as the closest of allies, we will make a hemisphere of economic freedom and prosperity,” he said.
Bessent characterised Argentina’s woes as “a moment of acute illiquidity”, suggesting he did not see a fundamental issue with its ability to make good on its debt. It was not immediately clear what the US was asking of Argentina in return for its aid. Milei has denied that the US asked Argentina to get rid of a separate US$18 billion swap line with China.