The US Treasury is in discussions with Argentina to provide a $20 billion swap line to the South American country’s central bank, Treasury Secretary Scott Bessent said Wednesday, as right-wing President Javier Milei seeks to stabilise markets ahead of upcoming midterm elections. Following the announcement, the Argentine peso gained 2.4 percent to 1,333.90 per dollar.“The Treasury is currently in negotiations with Argentine officials for a $20 billion swap line with the Central Bank,” Bessent said in a social media post, a day after he and US President Donald Trump spoke with Milei, AFP reported. He added that the US is also prepared to purchase Argentina’s dollar-denominated bonds as needed.Milei, an ally of Trump in Latin America, thanked the US leadership for their “support and confidence.” Swap lines allow central banks to exchange currencies at predetermined rates for a specified period, helping stabilise markets during periods of financial stress.Trump, speaking on the sidelines of the UN General Assembly, said the US would assist Argentina but added, “I don’t think they need a bailout.” Argentina’s currency had weakened sharply after Milei’s party lost the Buenos Aires provincial election on September 7, a key indicator ahead of national legislative elections on October 26.Bessent emphasised that Argentina “has the tools to defeat speculators, including those who seek to destabilise Argentina’s markets for political objectives.” However, domestic criticism emerged, with Senator Elizabeth Warren calling a potential US intervention “deeply troubling” and questioning the use of emergency funds to bolster a foreign government’s financial markets.The announcement comes as Milei faces declining support following two years of austerity measures and a corruption scandal involving his sister, after initially being cheered by investors upon his 2023 election.
