US Treasury Secretary Scott Bessent on Wednesday said he was working to help corral the private sector around a new US$20-billion "facility" to support Argentina's embattled economy.
"We are working on a US$20-billion facility that would be adjacent to our swap line, of private banks and sovereign wealth funds that I think would be more aimed at the debt market," he told reporters in Washington.
Bessent added that he had spent "weeks" working on the private-sector solution to Argentina's upcoming debt payments, which would come on top of the US$20-billion US swap line the US Treasury recently set up.
"So that would be a total of US$40 billion for Argentina," he said.
Argentine stocks rebounded on the promise of new economic aid.
Bessent's comments mark the latest round of support from the administration of Donald Trump for Argentina's President Javier Milei, who faces an uphill battle in crucial midterm elections later this month.
Milei enacted sweeping budget cuts after taking office in 2023 in a bid to quell inflation and turn the economy around, drawing fierce opposition and widespread protests.
Last week, Bessent confirmed the Treasury had set up an initial US$20-billion swap line with Buenos Aires, adding that it had already begun purchasing Argentine pesos to help support the currency on global markets.
On Tuesday, Trump hosted Argentina's head of state at the White House and threw his support behind him ahead of the elections.
However, he warned the support was conditional on a good performance by Milei's La Libertad Avanza party in the midterms.
"If he loses, we are not going to be generous with Argentina," warned the US president.
The strong US showing of support for Argentina this week has unfolded on the sidelines of the annual meetings of the International Monetary Fund (IMF) and World Bank in Washington.
The IMF, which has its own multi-billion dollar loan programme with Buenos Aires, has supported Washington's bilateral support for Argentina's economy.
In an interview on Wednesday, Milei said he was confident of US financial support so long as he remains in office and vowed to maintain his budget-slashing agenda.
"We continue to advance the ideas of freedom, so at least until 2027 we have that support assured," he told US network CNBC, in an interview that was dubbed into English.
Milei, an economist, voiced hope that the legislative elections would increase his base to allow him to pursue his policies.
"I have no intention of changing course until the end of my term," he said. "I am committed to the agenda of lowering taxes, deregulating and keeping the economy growing."
He said that Trump’s aid package was intended to help his nation honour its debt and expressed confidence on his party’s ability to do well in the upcoming midterm elections.
Bessent said Milei would continue to enjoy US support for as long as he had a blocking veto on legislation in Congress.
"It is not election-specific, it is policy-specific," he said. "So as long as Argentina continues enacting good policy, they will have US support."
Bessent, who said the US had again bought pesos on Wednesday in the spot market, also hinted that Washington may buy up Argentine debt, though he refused to expand on the subject.
Trade deal talks?
Government sources said Wednesday that talks over a trade deal between the two nations is ongoing, with hopes a deal could be announced soon.
According to the Noticias Argentinas news agency, the agreement could be confirmed this week and will see the elimination, and in some cases reduction, of reciprocal tariffs on more than 100 products.
Economy Minister Luis Caputo confirmed Tuesday that a deal is in the works.
"We expect announcements about the agreement soon. It will be ready soon. I don't want to say anything because we don't say anything until it's finalised," he said.
Foreign Minister Gerardo Werthein and Deregulation & State Transformation Minister Federico Sturzenegger also anticipated a deal.
"We are going to have a fairly unprecedented trade agreement within the United States and that agreement will allow certain sectors of our economy to have privileged access to the US market," Sturzenegger said during an interview with a streaming channel.
"What Javier has with Trump has two dimensions: the part that has been most in the media about Treasury aid, the exchange market, the swap, but then there is a part that we have been working on for many months, a trade agreement," the official said.
– TIMES/AFP/NA
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