Argentina-US swap line talks: Washington proposes $20 billion help; peso rises 2.4% ahead of elections

The US Treasury is in discussions with Argentina to supply a $20 billion swap line to the South American nation’s central financial institution, Treasury Secretary Scott Bessent mentioned 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 % to 1,333.90 per greenback.“The Treasury is currently in negotiations with Argentine officials for a $20 billion swap line with the Central Bank,” Bessent mentioned in a social media put up, a day after he and US President Donald Trump spoke with Milei, AFP reported. He added that the US can be ready to buy Argentina’s dollar-denominated bonds as wanted.Milei, an ally of Trump in Latin America, thanked the US management for his or her “support and confidence.” Swap traces enable central banks to change currencies at predetermined charges for a specified interval, serving to stabilise markets in periods of monetary stress.Trump, talking on the sidelines of the UN General Assembly, mentioned the US would help Argentina however added, “I don’t think they need a bailout.” Argentina’s foreign money had weakened sharply after Milei’s occasion misplaced the Buenos Aires provincial election on September 7, a key indicator ahead of nationwide 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, home criticism emerged, with Senator Elizabeth Warren calling a possible US intervention “deeply troubling” and questioning the use of emergency funds to bolster a overseas authorities’s monetary markets.The announcement comes as Milei faces declining help following two years of austerity measures and a corruption scandal involving his sister, after initially being cheered by buyers upon his 2023 election.