>US Treasury secretary Scott Bessent said that Washington was in talks to provide a $20bn swap line to Argentina and prepared to buy its dollar debt, vowing support for libertarian President Javier Milei in defeating “speculators”. Bessent said that the White House would be “resolute in our support for allies of the US”, as it sought to calm a market crisis engulfing Milei, the only Trump ally leading a major Latin American economy. In a post on X on Wednesday, Bessent said that “the Treasury is currently in negotiations with Argentine officials for a $20 billion swap line with the Central Bank”. He added: “The US Treasury stands ready to purchase Argentina’s USD bonds and will do so as conditions warrant.” Referring to a Treasury fund used in 1995 to bail out Mexico, he said: “We are also prepared to deliver significant standby credit via the Exchange Stabilization Fund, and we have been in active discussions with President Milei’s team to do so.”
>Milei is battling the worst crisis of his presidency ahead of midterm elections next month, when the public will deliver its verdict on economic policies that pulled the country back from the brink of hyperinflation but have weighed on growth in recent months. A heavy defeat for Milei’s party in a regional election this month and a corruption scandal have alarmed investors, sparking a run on the peso last week that has threatened to force a chaotic devaluation of the currency. “We’re not going to let a disequilibrium in the market cause a back-up in his substantial economic reforms,” Bessent told Fox Business on Wednesday, referring to Milei. “I don’t think the market has lost confidence with him.”
>Prices for Argentina’s dollar bonds edged higher following Bessent’s latest intervention, following a steep rally on Monday, when the Trump administration first said it would support Milei. The peso has soared 10 per cent since Monday, rebounding to the level it was at before a surprise loss for Milei at an election in Buenos Aires province two weeks ago. Argentina’s Merval share index rose nearly 5 per cent in dollar terms on Wednesday, though it remains down 12 per cent over the past month. “Thank you President Trump and Secretary Bessent for your firm support and confidence in the Argentine people,” Milei said on X after Wednesday’s announcement. “Together we will build a path to stability, prosperity and freedom.”
>Some investors had expected the US to directly buy Argentine pesos — a suggestion Bessent made on Monday — to keep the currency above the lower limit of a trading band against the dollar that has come under attack in recent weeks. Argentina also has a $18bn swap line with the People’s Bank of China but only $5bn of this is currently active. Senior Trump officials have previously harshly criticised the China swap, and analysts say ending it may be a condition of a US swap line. “The announcement should be enough to stabilise expectations and quash fears of a devaluation or default in the short term,” said Ramiro Blazquez Giomi, a strategist at StoneX financial services company. “But Milei will need to use this as a jumping-off point for bigger political and policy changes if he wants that stability to last,” he added.
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On a side note: Did Bessent get botox?
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Based Millei taking soy exports away from the USA and getting bailouts for their currency propping shenanigans
kittenTakeover on
Can someone who has more knowledge of the deal and economics explain what exactly this deal is and what risks or consequences it has to the US?
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>US Treasury secretary Scott Bessent said that Washington was in talks to provide a $20bn swap line to Argentina and prepared to buy its dollar debt, vowing support for libertarian President Javier Milei in defeating “speculators”. Bessent said that the White House would be “resolute in our support for allies of the US”, as it sought to calm a market crisis engulfing Milei, the only Trump ally leading a major Latin American economy. In a post on X on Wednesday, Bessent said that “the Treasury is currently in negotiations with Argentine officials for a $20 billion swap line with the Central Bank”. He added: “The US Treasury stands ready to purchase Argentina’s USD bonds and will do so as conditions warrant.” Referring to a Treasury fund used in 1995 to bail out Mexico, he said: “We are also prepared to deliver significant standby credit via the Exchange Stabilization Fund, and we have been in active discussions with President Milei’s team to do so.”
>Milei is battling the worst crisis of his presidency ahead of midterm elections next month, when the public will deliver its verdict on economic policies that pulled the country back from the brink of hyperinflation but have weighed on growth in recent months. A heavy defeat for Milei’s party in a regional election this month and a corruption scandal have alarmed investors, sparking a run on the peso last week that has threatened to force a chaotic devaluation of the currency. “We’re not going to let a disequilibrium in the market cause a back-up in his substantial economic reforms,” Bessent told Fox Business on Wednesday, referring to Milei. “I don’t think the market has lost confidence with him.”
>Prices for Argentina’s dollar bonds edged higher following Bessent’s latest intervention, following a steep rally on Monday, when the Trump administration first said it would support Milei. The peso has soared 10 per cent since Monday, rebounding to the level it was at before a surprise loss for Milei at an election in Buenos Aires province two weeks ago. Argentina’s Merval share index rose nearly 5 per cent in dollar terms on Wednesday, though it remains down 12 per cent over the past month. “Thank you President Trump and Secretary Bessent for your firm support and confidence in the Argentine people,” Milei said on X after Wednesday’s announcement. “Together we will build a path to stability, prosperity and freedom.”
>Some investors had expected the US to directly buy Argentine pesos — a suggestion Bessent made on Monday — to keep the currency above the lower limit of a trading band against the dollar that has come under attack in recent weeks. Argentina also has a $18bn swap line with the People’s Bank of China but only $5bn of this is currently active. Senior Trump officials have previously harshly criticised the China swap, and analysts say ending it may be a condition of a US swap line. “The announcement should be enough to stabilise expectations and quash fears of a devaluation or default in the short term,” said Ramiro Blazquez Giomi, a strategist at StoneX financial services company. “But Milei will need to use this as a jumping-off point for bigger political and policy changes if he wants that stability to last,” he added.
On a side note: Did Bessent get botox?
Based Millei taking soy exports away from the USA and getting bailouts for their currency propping shenanigans
Can someone who has more knowledge of the deal and economics explain what exactly this deal is and what risks or consequences it has to the US?
How do I short the Argentine government