The United States is moving forward with a potential $20 billion currency swap agreement with Argentina’s central bank, a step aimed at stabilizing the peso and easing the country’s financial turmoil.
US Treasury Secretary Scott Bessent confirmed that, beyond the swap line, Washington is prepared to purchase Argentine bonds in USD when market conditions are favorable, as well as extend standby credit through the Exchange Stabilization Fund. He emphasized that the move sends a clear signal to “speculators” attempting to exploit Argentina’s political and economic vulnerabilities.
Following the announcement, Argentine assets reacted positively: the 2030 sovereign bonds climbed, the Merval stock index advanced, and the peso appreciated nearly 3%.
The package is viewed as a crucial political boost for President Javier Milei – a close ally of US President Donald Trump – as Argentina heads toward its midterm elections on October 26. Milei faces mounting domestic challenges, including soaring inflation, economic contraction, and growing political unrest.
Yet, analysts caution that such financial assistance is only a short-term relief. Without deeper structural reforms in fiscal management, inflation control, and exchange-rate stabilization, Argentina’s economic instability will likely persist.
According to Bessent, several major US corporations are exploring direct investments in Argentina, though much will depend on the outcome of the legislative elections. The financial lifeline therefore represents both immediate relief and a potential bridge for longer-term US capital inflows.
On the sidelines of the 80th UN General Assembly in New York on September 22, President Trump expressed strong support for Milei, pledging to back Argentina during its crisis. Both leaders share similar economic agendas focused on curbing inflation, cutting public spending, and restoring investor confidence.
Despite his reformist pledges, Milei faces significant hurdles. His party has been losing domestic support and recently suffered setbacks in regional elections. The ongoing financial crisis threatens to erode public trust even further, making it harder for his administration to secure the legislative authority needed to push through comprehensive reforms.
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