WASHINGTON – The U.S. Treasury has finalized a framework for a $20 billion lifeline to Argentina, confirmed by Treasury Secretary Bessent, involving the purchase of Argentine pesos. The move aims to stabilize Argentina’s financial markets by providing the central bank with the ability to exchange pesos for U.S. dollars.
The currency swap, as the arrangement is known, comes as Argentina grapples with notable peso devaluation following recent electoral setbacks for President Javier Milei.The financial injection is intended to bolster confidence in the Argentine economy and support its fiscal strategy, though the Trump administration’s intervention has drawn scrutiny given its “America First” policy. Bessent defended the action, stating, “Argentina faces a moment of acute illiquidity. The international community – including @IMFNews – is unified behind argentina and its prudent fiscal strategy, but only the United States can act swiftly.”
The peso has weakened considerably since President Milei, an ally of former President Donald Trump, experienced losses in local elections, raising concerns about his ability to maintain a legislative majority in upcoming midterm elections. Trump has publicly praised Milei and endorsed his reelection bid.
The $20 billion framework allows Argentina’s central bank to exchange pesos for U.S. dollars with the Treasury, injecting liquidity into the market.The initiative is unfolding as a developing situation, with further updates expected.
