WASHINGTON – The US Treasury is negotiating with Argentina for a $20 billion swap line with the South American country’s central bank, as right-wing President Javier Milei seeks to stabilise markets ahead of national legislative elections.
Treasury Secretary Scott Bessent confirmed the discussions on social media, adding that the United States is also prepared to purchase Argentine dollar bonds. Following the announcement, the Argentine peso rose 2.4 percent to 1,333.90 per US dollar.
Swap lines allow two central banks to exchange currencies at a predetermined rate for a set period, providing liquidity and market support. The announcement comes a day after Bessent and former President Donald Trump spoke with Milei, who thanked them for their support and confidence.
Trump, speaking at the UN General Assembly in New York, said the United States would assist Argentina but suggested the country did not require a bailout. The peso had dropped sharply following Milei’s party loss to the center-left Peronist movement in a Buenos Aires provincial election on 7 September. The vote is seen as a key indicator ahead of Argentina’s 26 October midterms.
Bessent emphasised that the Treasury stands ready to act, including purchasing Argentina’s US dollar bonds, to stabilise the economy and counter market speculators. He noted that Argentina possesses the tools to address destabilising pressures, including politically motivated market attacks.
The US plans, however, have drawn scrutiny domestically. Senator Elizabeth Warren raised concerns about potential misuse of emergency funds to support a foreign government’s currency, prompting Bessent to defend the administration’s approach as an opportunity to stabilise Latin America economically and geopolitically.
Milei, once celebrated by investors for free-market reforms in 2023, has seen waning support amid two years of austerity measures and a corruption scandal involving his sister.
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