MercoPress. South Atlantic News Agency

US buys Argentine pesos to rescue Milei from “acute illiquidity”

Bessent threw a lifeline to Milei's remaining two years in office

US Secretary of the Treasury Scott Bessent announced on Thursday a currency swap with Argentina, whereby Washington would obtain pesos from the South American country in exchange for US$20 billion, following intensive meetings in Washington with Economy Minister Luis Toto Caputo.

“Please allow me to convey my deepest gratitude for your unwavering support to Argentina. Your steadfast commitment has been remarkable, and I am profoundly appreciative of the tireless efforts and dedication demonstrated by your exceptional team at the Treasury throughout our engagements this week in Washington. Their hard work has laid a strong foundation for our shared goals,” Caputo wrote in English on X in a message to Bessent.

The Secretary ratified his country's strong commitment to Argentina, acknowledging the “acute illiquidity” despite Buenos Aires' strong economic fundamentals and ongoing structural reforms. The Treasury is prepared to take “whatever exceptional measures are warranted to provide stability to markets,” Bessent said.

“The @USTreasury has concluded 4 days of intensive meetings with Minister @LuisCaputoAR and his team in DC. We discussed Argentina’s strong economic fundamentals, including structural changes already underway that will generate significant dollar-denominated exports and foreign exchange reserves,” Bessent noted on social media.

The Treasury emphasized that President Donald Trump was committed to strengthening allies who welcome fair trade and American investment, noting that US business leaders were eager to invest in the South American country, given Argentina's reform agenda of fiscally sound economic freedom through lower taxes, higher investment, and private sector job creation -a matter of “systemic importance” and a strategic interest for the White House.

Meanwhile, International Monetary Fund (IMF) Managing Director Kristalina Georgieva praised Washington's actions and confirmed her agency was “fully aligned” with Argentina's “prudent fiscal strategy,” of ”fiscal discipline and a robust foreign exchange (FX) regime,” just ahead of this month's midterm elections that could condition the remaining two years of President Javier Milei's La Libertad Avanza (LLA) in Casa Rosada.

“We reviewed the broad political consensus in Argentina for the second half of President @JMilei’s term,” Bessent explained.

Trump and Milei are scheduled to meet in Washington on Oct. 14.