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US Treasury secretary Scott Bessent said Washington would arrange a $20bn package to help Argentina make debt repayments, as Donald Trump’s administration seeks to end a market crisis roiling libertarian President Javier Milei.
Bessent said the “private-sector solution to Argentina’s upcoming debt payments”, would be funded by private banks and sovereign wealth funds, adding “many” had expressed interest in participating.
“It’s not that nascent. We’ve actually been working on it for weeks,” he said in Washington.
The facility would be separate from a $20bn currency swap line the US Treasury announced with Argentina’s cash-strapped central bank last Thursday, Bessent added.
The US financial lifeline has only partially quelled market turmoil that began last month when Milei’s pro-business government fell into a political crisis, ahead of midterm legislative elections on October 26.
The swap line announcement and an extraordinary direct US intervention in Argentina’s currency market last week halted a bond price plunge and a run on the peso. But pressure returned on Tuesday when President Trump suggested the Washington may withdraw support if Milei’s party performs poorly at the midterms.
Dollar-backed Argentine government bonds rose in price and fell in yield following Bessent’s announcement, while the peso recouped losses from earlier in the day to trade flat compared to Tuesday’s close.
Bessent said the Treasury had intervened again on Wednesday, without sharing details.
Gabriel Caamaño, an economist at Outlier, a financial consultancy in Buenos Aires, said: “The exchange rate was coming under pressure again, but this news and their purchase of pesos has calmed things down again. At least for the next while.”
Investors are concerned Argentina’s liquid central bank reserves are perilously low. Milei may need them to prop up the peso, pay for imports and make about $13bn in dollar debt repayments due next year.
Argentina has defaulted on its sovereign debt obligations three times since 2000.
Bessent did not immediately give details about what the US’s role in the debt facility would be.
Bessent has referred to Argentina as “a systemically important US ally in Latin America”, although the two countries are not significant trading partners.
Asked about the systemic risk of the Argentine debt crisis, Bessent said Barack Obama’s administration had previously “squandered a very prominent opportunity to bring in and move Latin American countries into the US sphere of influence”.
“The governments had swung from left to right and then, through neglect, they swung back far left again, where many of them are now,” Bessent said. “But now they’re coming back the other way.”
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