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US Treasury secretary Scott Bessent said Washington would arrange a $20bn package to help Argentina make debt repayments with capital from private banks and sovereign wealth funds as the Trump administration seeks to boost President Javier Milei amid his nation’s market crisis.
“It is a private-sector solution to Argentina’s upcoming debt payments, and many banks are interested in it, and many sovereign funds have expressed interest in being part of it,” Bessent told reporters in Washington on Wednesday.
“It’s not that nascent. We’ve actually been working on it for weeks,” he added.
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 libertarian Milei’s pro-business government stumbled into a political crisis ahead of crucial midterm elections. Milei’s party will seek to expand its tiny share of congressional seats when voters go to the polls 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.”
Argentina’s central bank chief Santiago Bausili told an event in Washington on Wednesday that he “would hope” the swap line agreed last week would be in place before the midterms.
“We’ve been working . . . day in and day out to complete the documentation associated with the swap, and hopefully, very soon, we’ll be able to execute the framework agreement,” he added.
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.
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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.”