The US directly purchased Argentine pesos on Thursday and finalized a $20 billion currency swap framework with Argentina’s central bank, said treasury secretary Scott Bessent. The move is intended to provide assistance amid the Latin American country’s economic turmoil. In a social media post on conducted four days of meetings with Argentinian finance minister Luis Caputo in Washington DC to come up with the deal. Bessent emphasized that the swap is not a bailout. He highlighted Argentina’s strong economic fundamentals, including structural changes already underway that are expected to generate significant dollar-denominated exports and foreign exchange reserves. “Argentina faces a moment of acute illiquidity. The international community – including @IMFNews – is unified behind Argentina and its prudent fiscal strategy, but only the United States can act swiftly. And act we will,” Bessant said. He also noted the close coordination between Argentina and the International Monetary Fund. “Argentina’s policies, when anchored on fiscal discipline, are sound. Its exchange rate band remains fit for purpose,” he added. Looking ahead, Bessant said he looks forward to the meeting between President Trump and President Milei on October 14 and to further discussions with Minister Caputo at the IMF Annual Meetings.Despite this, US farmers and Democratic lawmakers have criticized the deal as a bailout of a country that has benefited from soybean sales to China, to the detriment of US farmers.Argentina is one of the biggest economies in Latin America and the largest borrower from the International Monetary Fund, with total outstanding credit of $41.8 billion as of August 31.The offer of financial help comes as Trump has frequently promoted his “America First” agenda. Critics contend that the planned intervention is a way to reward a personal friend of Trump’s who is facing a critical midterm election next month.Caputo was in Washington last week for talks with Bessent about the swap line. Following the announcement, Milei celebrated it on social media, hailing his economy minister, Luis Caputo, as “far and away, the best Minister of Economy in all of Argentine history…!!!”Argentina’s deregulation minister, Federico Sturzenegger, also congratulated Caputo and the rest of the economic team, saying: “Let’s keep working so that our want children to stay and live in Argentina,” and adding a pitch to voters to support Milei in the crucial midterm elections later this month, reported AP.
