The United States is negotiating a $20 billion swap line with Argentina’s central bank, aiming to bolster the South American nation’s financial stability ahead of its October midterm elections. Treasury Secretary Scott Bessent confirmed the talks on Wednesday, adding that Washington stands ready to extend further support through the Treasury’s Exchange Stabilization Fund (ESF).
The proposed deal includes potential purchases of U.S. dollar-denominated Argentine bonds and standby credit facilities. Bessent praised President Javier Milei’s fiscal reforms, citing progress in liberalizing prices and cutting deficits. He described the measures as a “bridge to the election,” intended to shield Argentina from market volatility and speculative pressure.
The announcement follows Milei’s recent electoral setback, which has raised doubts about the durability of his pro-market agenda. Lawmakers have challenged his fiscal discipline by overturning vetoes on spending bills, intensifying political and economic uncertainty.
Markets responded positively to the U.S. pledge, with Argentine assets rebounding and the peso recovering after a sharp decline that forced the central bank to deploy over $1 billion in reserves.
While the structure of the swap line and credit remains under discussion, Bessent emphasized the Treasury’s readiness to act. He also noted growing interest from U.S. firms in investing in Argentina, contingent on political stability.
President Donald Trump echoed support for Argentina, stating that while he backs the country’s efforts, he does not believe a bailout is necessary.
The_US_Treasury_Department-Picture by-Roman-Boed
Excerpts from azzet.com article by Oliver Gray
