Washington — The US is in negotiations for a $20bn swap line with Argentina’s central bank and stands ready to do what is needed to support the South American country, US treasury secretary Scott Bessent said on Wednesday in a post on X.
Bessent said the US is prepared to purchase Argentina’s US dollar-denominated bonds and will do so as conditions warrant. The US is also set to deliver significant standby credit via the Exchange Stabilisation Fund, he said.
“Argentina has the tools to defeat speculators, including those who seek to destabilise Argentina’s markets for political objectives,” he said.
Bessent also said the US is ready to purchase secondary or primary government debt and is working with the Argentine government to end the tax holiday for commodity producers converting foreign exchange.
Argentina’s government bond prices rose sharply on Wednesday and stocks edged higher after Bessent provided details on his previous pledge to support Latin America’s third-largest economy and its president, Javier Milei, Trump’s right-wing ally.
The country’s embattled peso currency has strengthened this week in a sharp reversal from last week, when the Argentine central bank burnt through more than $1bn of reserves to defend its currency.
Markets there had been roiled by corruption allegations inside Milei’s circle and a larger-than-expected loss in a local election in Buenos Aires, reflecting growing frustration with austerity measures and triggering investor concern over Milei’s ability to continue to reshape the economy.
Bessent’s tweet on Wednesday helped reassure investors who were unsettled after US President Donald Trump on Tuesday said he would support Argentina but did not think it needed a bailout.
In an interview on Fox Business Network on Wednesday, Bessent underscored US support for Argentina and Milei, adding that he did not think the market had lost confidence in the Argentine leader, but was remembering earlier crises.
“We are not going to let a disequilibrium in the market (to) cause a backup in his substantial economic reforms,” Bessent told the network’s Mornings with Maria programme.
“I think the market is looking in the rear-view mirror and is looking at decades, if not a century, of terrible Argentinian mismanagement,” he said. “People are skittish. It’s very hard to believe that it is different this time, but I believe with President Milei it is.”
Milei, who met with Trump and Bessent on Tuesday, thanked the US for its support.
“Thank you President Donald Trump and secretary Scott Bessent for your firm support and confidence in the Argentine people,” he said in response on X.
“We value deeply our friendship with the US and your commitment to strengthen our partnership on the basis of shared values. Together we will build a path of stability, prosperity and freedom. Maga!”
Argentina’s government bond prices rallied after Bessent announced details of support, with the country’s 2030 issue up more than four cents.
“Well, what more can be added than thank you secretary Scott Bessent,” Argentina’s economy minister Luis Caputo wrote on X. “Let’s all work together to make our country great again!”
Reuters
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