The United States Treasury Secretary, Bezent, stated on Wednesday (September 24th) that the United States is in talks with Argentina on an economic support plan worth 200 billion US dollars. They are preparing to purchase Argentina’s US dollar bonds to help the country contain financial turmoil and provide much-needed support for President Javier Milei’s free market reform.
The day before announcing this support plan, Bezent and U.S. President Trump met with Milei during the United Nations General Assembly in New York. Milei is a close ally of Trump.
Bezent mentioned on the social media platform X on Wednesday, that as President Trump said, “We are ready to make every effort to support Argentina and the Argentine people”.
“The Treasury Department is currently negotiating with Argentine officials to establish a 200 billion US dollar currency swap agreement with the central bank. We are closely working with the Argentine government to prevent excessive market volatility,” he said.
A currency swap line is a transaction in which the central banks of two countries agree to exchange currencies at a specified exchange rate for a specific period.
Bezent also stated that the Treasury Department is prepared to purchase Argentina’s US dollar bonds and will act when conditions allow it. “We are also prepared to provide a substantial standby credit through the Foreign Exchange Stabilization Fund, and we have been actively discussing this with President Milei’s team.”
The Treasury Secretary also mentioned that the United States is cooperating with the Argentine government to end tax exemptions for producers when exchanging foreign currency.
“Argentina has the tools to defeat speculators, including those who try to disrupt the stability of the Argentine market for political purposes,” he said.
Following this news, the prices of Argentine government bonds rose sharply on Wednesday, and the stock market also rallied. The Argentine peso, which has been struggling, also strengthened.
Bezent reiterated the United States’ support for Argentina during an interview with Fox News on Wednesday. He believes that the market has not lost confidence in Argentine President Milei but is reevaluating decades of poor management in Argentina.
“We will not let market imbalances hinder his (Milei’s) major economic reforms,” Bezent stated.
Milei expressed gratitude to President Trump and Treasury Secretary Bezent on platform X for their steadfast support and trust in the Argentine people.
“We greatly value our friendship with the United States and your commitment to strengthening the partnership between our two countries on a shared value basis. We will build a stable, prosperous, and free path together. MAGA!” he said.
Argentina has long been facing economic difficulties. Over the past two weeks, the country has experienced escalating financial turmoil, triggered by local elections in Buenos Aires province. President Milei’s “Freedom Advances party” suffered a severe defeat against leftist opponents in the elections.
The election results have raised concerns among investors as it is seen as a precursor to the crucial midterm congressional elections in October. Milei has been working to ease market tensions before the midterm elections, which may determine the future of his austerity policy agenda.
Bezent hinted at U.S. support for Milei’s success in the midterm elections in a post on platform X on Wednesday.
“I am also in contact with several U.S. companies, which plan large-scale foreign direct investments in various sectors in Argentina in a positive scenario after the election results,” Bezent said.