Washington Offers Financial Backing
The United States is preparing a $20 billion currency swap line with Argentina’s central bank, Treasury Secretary Scott Bessent confirmed on Wednesday. The move comes as Argentina faces economic strain ahead of its October legislative elections.
Bessent said Washington is also ready to purchase Argentina’s dollar-denominated government debt and provide additional standby credit through the Exchange Stabilization Fund if necessary. He emphasized that the U.S. will do “whatever is necessary” to support Argentina’s market stability.
Support for President Milei
President Javier Milei, a close ally of President Donald Trump, has pursued aggressive reforms aimed at restoring Argentina’s economy after years of mismanagement. Bessent noted that markets remain cautious given Argentina’s history of financial crises but stressed that “this time is different” under Milei’s leadership.
Trump, speaking at the United Nations General Assembly in New York, said the U.S. supports Argentina but does not believe a bailout is needed. Milei thanked both Trump and Bessent for their “firm support and confidence in the Argentine people,” pledging to continue reforms based on stability, prosperity, and freedom.
Market Reaction
Following Bessent’s comments, Argentina’s peso strengthened and government bond prices rallied. The country’s 2030 bonds rose more than four cents, and the central bank reported relief after burning through over $1 billion in reserves last week to defend its currency.
Investors had grown uneasy after Milei’s party lost a local race in Buenos Aires, raising questions about public support for austerity measures. Bessent countered those doubts, insisting the administration’s reforms would not be derailed by temporary setbacks.
U.S. Companies Eye Investment
Bessent said several American companies have expressed interest in direct investment across Argentina’s industries, contingent on continued political stability. He also confirmed discussions with Buenos Aires about ending tax breaks for commodity exporters converting foreign exchange, part of Milei’s broader fiscal overhaul.
Looking Ahead
Argentina holds midterm elections on October 26. Milei’s party hopes to increase its minority share in Congress, which would strengthen his ability to push reforms. The U.S. Treasury has positioned itself as a key partner, signaling long-term support for Argentina’s economic transformation.
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