US finalizes $20 bn economic lifeline for Argentina, buys pesos

US Treasury Secretary Scott Bessent said Thursday that Washington had bought Argentine pesos and finalized a $20 billion economic support program to help prop up the South American nation's faltering finances.

Argentina's right-wing President Javier Milei, a close ally of Donald Trump, swiftly thanked the American leader for his "vision and powerful leadership" following the announcement.

Milei had been struggling with market turbulence after a defeat in Buenos Aires provincial elections seen as a bellwether for upcoming mid-terms.

"Argentina faces a moment of acute illiquidity," Bessent wrote on social media Thursday, adding that Washington was well-positioned to act quickly.

"To that end, today we directly purchased Argentine pesos," the Treasury chief said. "Additionally, we have finalized a $20 billion currency swap framework with Argentina's central bank."

Bessent stressed that the US Treasury is "prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets."

His comments on X came after four days of meetings with Argentina's Economy Minister Luis Caputo in Washington.

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Bessent added that Trump and Milei are expected to meet next week.

The US treasury secretary said he plans to see Caputo again next week on the sidelines of the annual meetings of the International Monetary Fund and World Bank in Washington.

'Systemic importance'

The Trump administration's pledge to support Argentina has faced criticism, with Democratic lawmakers calling on Trump last month to halt his plan.

In a letter, they pointed to Argentina's recent decision to temporarily suspend soybean export taxes, a move that they said undercut US farmers -- who are already facing multiple challenges -- in the global market.

Bessent has previously defended the plans.

He told CNBC in early October that "as far as what the US is doing, just to be clear, we are giving them a swap line. We are not putting money into Argentina."

Bessent added Thursday that "the success of Argentina's reform agenda is of systemic importance" as well.

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He said "a strong, stable Argentina which helps anchor a prosperous Western Hemisphere is in the strategic interest of the United States," arguing that its success should be a bipartisan priority.

At the start of the month, Bessent told CNBC that many governments in South America "moved from far-left to center-right. We did not support them, and then they took a hard lurch to the left."

At the time, he called Argentina a "beacon," adding that other countries could follow its lead.

In his statement to Trump and Bessent on X, Milei wrote Thursday that "as the closest of allies, we will make a hemisphere of economic freedom and prosperity."

Source: AFP