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The US is discussing a $20 billion swap line with Argentina and is ready to buy the country’s dollar bonds, Treasury Secretary Scott Bessent said, giving President Javier Milei “a bridge” until key midterm elections next month.
The move shows President Donald Trump’s eagerness to help his libertarian ally fend off a run on the peso.
The two leaders and their teams met Tuesday on the sidelines of the UN General Assembly in New York, and Milei immediately thanked his US counterpart for the “firm support” on Wednesday.
“The Treasury is currently in negotiations with Argentine officials for a $20 billion swap line with the Central Bank,” Bessent said in post on X. “We are working in close coordination with the Argentine government to prevent excessive volatility.”
Argentina markets, which have been roiled in the past few weeks after a weak showing by Milei in a provincial election, have surged this week in anticipation of US support, first signaled Monday.
The peso climbed 2.4%, while dollar bonds jumped across the curve.
Notes due in 2035, some of the most liquid, rose about 4 cents, erasing losses seen since the Buenos Aires election.
Speaking to Fox News on Wednesday morning, Bessent called the aid a “bridge to the election,” referring to Argentina’s midterms on Oct. 26 where Milei is looking to boost his party’s presence in Congress after lawmakers in recent weeks have moved to overturn his vetoes on spending bills.
“I don’t think the market has lost confidence in him, I think the market is looking in the rear view mirror and looking at decades — about a century — of terrible Argentinian mismanagement,” Bessent said.
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