US Senator Elizabeth Warren is requesting that US Treasury Secretary Scott Bessent terminate its US$20-billion currency swap line with Argentina, asserting that if the arrangement has run its course, it should be shut down.
The US extended a line of credit to Argentina before its 2025 midterm elections as President Javier Milei’s party was under pressure after losing a local election in Buenos Aires Province. In September, Bessent said the support was meant to serve as a “bridge” to help Milei get through the election and continue his economic reforms.
The department tapped what is known as the Exchange Stabilisation Fund, which allowed the Treasury secretary to intervene in Argentina’s financial markets and buy an undisclosed amount of pesos to stem a run on the currency. Argentina drew down US$2.5 billion from the swap, but Bessent said in January that it’s been fully repaid. Milei’s government took out a loan from an unnamed multilateral lender to repay the Treasury.
Warren is the top Democrat on the Senate Banking Committee. Bessent is expected to appear before the panel today and the Argentina swap line could be a subject he’s queried on, among other topics.
In her letter, a copy of which was reviewed by Bloomberg, Warren said that it appears the Treasury has left in place an “Exchange Stabilisation Agreement” with Argentina despite advertising the intervention as being a short-term arrangement.
“Despite Treasury’s assertion that its use of the ESF was for an ‘acute, short-term, and urgent’ purpose, it appears — by leaving the ESA in place — to have left open the possibility of continued use of the ESF in Argentina well after the October 2025 elections,” she wrote in a letter delivered Wednesday.
Bessent appeared before the House Financial Services Committee Wednesday, where he clashed with several Democratic lawmakers and declined to give an opinion on whether US President Donald Trump could remove a member of the Federal Reserve Board of Governors for a policy disagreement.
The ESF has only been used to support foreign governments a few times in recent history, most notably to help Mexico weather a crisis in the early 1990s.
Warren asked Bessent to provide a copy of the US agreement with Argentina’s Central Bank concerning the use of the ESF as well as written confirmation that it has been terminated by February 12.
by Daniel Flatley, Bloomberg
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