US Develops $20 Billion Facility to Support Argentina’s Economy

The United States is establishing a new financial initiative worth $20 billion aimed at bolstering Argentina’s struggling economy. US Treasury Secretary Scott Bessent announced on Wednesday that this “facility” will engage the private sector, drawing in investment from banks and sovereign wealth funds to address Argentina’s upcoming debt obligations.

Bessent detailed the plan during a press conference in Washington, explaining that the initiative will complement an existing $20 billion swap line already set up between the US Treasury and Buenos Aires. This brings the total potential support to $40 billion for Argentina. Bessent emphasized that the funding would focus on the debt market, signaling a significant commitment from the US government as Argentina navigates economic challenges.

The announcement has had an immediate positive impact on Argentine markets, reviving investor confidence amid a backdrop of political and economic uncertainty. The support comes as Argentina’s right-wing populist leader, Javier Milei, prepares for critical midterm elections later this month, after implementing extensive budget cuts to combat soaring inflation since taking office in 2023.

Bessent confirmed that the Treasury had already initiated measures to stabilize the Argentine peso by purchasing it on global markets. He also revealed that his discussions regarding this private-sector solution have been ongoing for several weeks. The timing of this financial support coincides with the annual meetings of the International Monetary Fund (IMF) and World Bank, where Argentina’s economic situation has been a focal point.

In a recent broadcast interview, Milei expressed optimism about US financial backing, asserting that as long as he remains in power, support for his libertarian economic policies is assured. “We continue to advance the ideas of freedom, so at least until 2027 we have that support assured,” he stated, reflecting his confidence in the US’s commitment.

Milei has faced fierce opposition since taking office, with widespread protests against his austerity measures. Nevertheless, he remains resolute in pursuing reforms aimed at reducing taxes, deregulating markets, and fostering economic growth. He believes that a successful outcome in the legislative elections could strengthen his position and facilitate the implementation of his policies.

Bessent reiterated the US’s support for Argentina, emphasizing that it hinges on the country’s commitment to sound economic policies. “It is not election-specific, it is policy-specific,” he noted, indicating that as long as Argentina continues to enact effective measures, US backing will persist.

As Argentina grapples with significant economic hurdles, the US’s renewed financial commitment signals a strategic partnership aimed at stabilizing the South American nation’s economy. The upcoming elections will be crucial for Milei as he seeks to maintain momentum in implementing his agenda while navigating the complexities of both domestic and international expectations.