The United States is in talks to provide Argentina with a US$20 billion (A$30.27 billion) swap line and stands ready to extend further financial support to stabilise the South American economy, Treasury Secretary Scott Bessent said on Wednesday.
In a post on X, Bessent confirmed that Washington is negotiating with Argentina’s central bank and is prepared to purchase U.S. dollar-denominated bonds from the country as conditions require.
He added that significant standby credit could be made available through the Treasury’s Exchange Stabilization Fund (ESF).
Bessent noted, “Under President Milei, Argentina has taken important strides toward stabilisation. He has achieved impressive fiscal consolidation and a broad liberalisation of prices and restrictive regulations, laying the foundation for Argentina’s historic return to prosperity.”
"Argentina has the tools to defeat speculators, including those who seek to destabilise Argentina's markets for political objectives," Bessent said.
"I will be watching developments closely and the Treasury remains fully prepared to do what is necessary."
The move comes as Argentine President Javier Milei faces mounting market pressure following his party’s heavy defeat in a recent provincial election.
The setback has heightened concerns over his ability to maintain support for a pro-market reform agenda aimed at controlling inflation, stabilising the peso, and strengthening investor confidence ahead of the 26 October midterm elections.
Bessent described the measures as a “bridge to the election”, designed to help Milei navigate a turbulent period in which lawmakers have challenged his fiscal restraint by overturning presidential vetoes on spending bills.
Markets welcomed the remarks, with Argentine assets rallying and the peso strengthening in recent sessions after last week’s steep sell-off that forced the central bank to use more than $1 billion in reserves to defend the currency.
It remains unclear whether both the swap line and the standby credit will be channelled through the ESF, though Bessent reiterated that the Treasury is “prepared to deliver” significant financial backing.
He also noted that U.S. companies had expressed interest in "substantial foreign direct investments" in Argentina if election results prove favourable, without providing specifics.
President Donald Trump echoed his Treasury chief on Tuesday, saying he supports Argentina but does not believe the country requires a bailout.
