The United States has renewed its financial backing for Argentina, with Treasury Secretary Scott Bessent confirming on Wednesday that Washington had again purchased Argentine pesos in the open market.
Speaking at a press conference, Bessent also said the Treasury is working with banks and investment funds to establish a $20 billion facility to invest in Argentina’s sovereign debt.
The new initiative will complement an existing $20 billion US currency swap line for Argentina, bringing the total US support to $40 billion — double the previously pledged amount.
“It is a private-sector solution to Argentina’s upcoming debt payments,” Bessent said.
“Many banks are interested in it, and many sovereign funds have expressed interest in being part of it.”
Bessent did not provide details about the latest peso purchases or a timeline for the launch of the debt facility but said the plan had been in the works for several weeks.
Asked whether the US might buy Argentine debt alongside the currency operations, he replied, “We could,” without elaborating.
The Treasury Secretary emphasized that the Trump administration’s financial backing for Buenos Aires was not tied to Argentina’s upcoming parliamentary elections.
“It is policy-specific. So as long as Argentina continues enacting good policy, they will have US support,” Bessent said.
Market reaction: bonds and peso gain as confidence rebounds
The announcement triggered an immediate positive reaction in Argentine markets.
Sovereign bonds maturing in 2035 climbed nearly two cents to trade above 59 cents on the dollar, according to Bloomberg data, while the peso strengthened as much as 0.4% in afternoon trading.
The remarks helped ease investor anxiety that emerged earlier in the week after President Donald Trump suggested the US would not “waste our time” with Argentina if President Javier Milei’s La Libertad Avanza party fails to perform well in the October 26 parliamentary elections.
“Bessent’s statement is aiming at solving that uncertainty,” said Pedro Siaba Serrate, head of research and strategy at PPI Argentina. “We were not completely ruling out additional hints ahead of the election.”
Still, broader market conditions remain volatile.
Argentina’s short-term interest rates surged for a second straight day, with the overnight collateralized peso repo rate — known locally as caución — hitting a record 170%, up sharply from 115% the day before.
Analysts said the rate spike is constraining commercial lending and consumer credit, adding pressure on economic activity.
Milei seeks stability ahead of elections
President Javier Milei attempted to calm investors in a CNBC interview aired earlier on Wednesday, saying that US financial support was secured at least until the end of his term in 2027.
Milei added that the US assistance package would help Argentina meet its debt obligations and expressed optimism about his party’s chances in the midterm vote.
While uncertainties linger over whether the aid is contingent on political outcomes, analysts agree the US Treasury’s continued peso purchases mark a strong signal of commitment.
“Regardless, the US continues to buy pesos, which is super positive for the government,” said Matias Montes, strategist at EMFI said in a Bloomberg report.
As Bessent put it, the Trump administration’s support is driven by “good policy,” not electoral results — a stance that could prove pivotal for Milei as he seeks to stabilize Argentina’s fragile economy and reassure global markets.
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