WASHINGTON – The United States finalized a $20 billion currency swap line with Argentina on Thursday and directly purchased Argentine pesos, in what Treasury Secretary Scott Bessent called an “exceptional measure” to stabilize turbulent markets in the debt-laden South American nation.
“US Treasury is prepared to take whatever exceptional measures are warranted to provide stability to markets,” Bessent said in a post on social media, confirming that the agreement followed four days of meetings with Argentina’s Economy Minister Luis Caputo in Washington, D.C. The move — a rare and controversial intervention — is intended to provide short-term relief to Argentina’s cash-strapped economy.
Argentine President Javier Milei, a self-proclaimed libertarian and close ally of US President Donald Trump, thanked Bessent for his “strong support” and praised Trump’s “powerful leadership.” “Together, as the closest of allies, we will make a hemisphere of economic freedom and prosperity,” Milei wrote on social media. However, the deal drew sharp criticism from US lawmakers and farmers, who accused the Trump administration of bailing out a foreign ally at domestic expense.
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Bessent pushed back, saying the arrangement was “not a bailout.” Still, the backlash intensified as Democratic senators introduced the “No Argentina Bailout Act”, a bill seeking to block Treasury from using the Exchange Stabilization Fund to aid Argentina. “It is inexplicable that President Trump is propping up a foreign government while he shuts down our own,” said Senator Elizabeth Warren, arguing that the move violates Trump’s “America First” pledge.
The deal comes as Argentina faces one of its worst economic crises in decades. Despite multiple IMF bailouts, the country remains the Fund’s largest debtor, owing $41.8 billion. Milei, who took office in late 2023, has imposed drastic austerity measures in a bid to slash spending and restore investor confidence. But with inflation still soaring and public anger mounting, his free-market experiment faces a crucial test ahead of midterm elections on October 26.
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A recent collapse in local markets — following heavy defeats for Milei’s allies in regional elections — triggered panic among investors. The US deal offers his administration a vital financial lifeline. After Bessent’s announcement, Argentina’s dollar bonds jumped 10%, and the Buenos Aires stock market surged 15%. Economy Minister Luis Caputo expressed “deep gratitude” to Bessent, calling the move a “remarkable show of commitment.”
Still, the absence of clear economic conditions on the US swap line has prompted criticism that the deal serves more as a political favor than a strategic investment — a sign of how economics and geopolitics are becoming increasingly intertwined in the Trump era.