The Trump administration is reportedly reviewing options to provide Argentina with financial support as the country battles economic turbulence, Treasury Secretary Scott Bessent said Monday.
The potential intervention comes as President Javier Milei presses forward with sweeping free-market reforms that have drawn praise from conservatives abroad but provoked resistance at home.
“These options may include, but are not limited to, swap lines, direct currency purchases, and purchases of U.S. dollar-denominated government debt from Treasury’s Exchange Stabilization Fund,” Bessent wrote in a series of posts on X. He emphasized that “fiscal discipline and pro-growth reforms are necessary to break Argentina’s long history of decline.”
Markets rallied on the news. The Merval Index jumped 7.6 percent, the peso strengthened by more than 4 percent, and Argentina’s risk rating — a measure of investor confidence — fell sharply after reaching its highest level in a year.
Milei, a libertarian economist who took office in December 2023, has become a favorite of U.S. conservatives, including President Trump.
His agenda has included slashing spending, dismantling tariffs and import restrictions, and prioritizing market freedom. Inflation, which stood near 26 percent when he entered office, dropped to 1.9 percent in July.
Yet his reforms have exacted a cost. The economy has contracted in recent months, and unemployment — now 7.6 percent, up from 5.7 percent a year earlier — has overtaken inflation as the top concern among Argentines.
Milei has acknowledged the pain but urged patience. “By no means am I saying that the problems are over,” he told business leaders last week in Córdoba. “But we have to keep going, keep pushing forward. Why? Because on the other side is the path to prosperity.”
The most striking option under consideration is the use of the Exchange Stabilization Fund, created in the 1930s to aid struggling foreign economies.
Unlike other tools, the fund lies entirely under the Treasury secretary’s control, giving the administration wide latitude to act without congressional approval.
Such unilateral action would be rare. Brad Setser, a senior fellow at the Council on Foreign Relations, noted that the United States typically coordinates aid with allies or the International Monetary Fund. “It would be incredibly unusual,” he said, calling Argentina a riskier bet than Mexico, which received a $20 billion U.S. loan package in 1995.
Argentina is already the IMF’s largest debtor, with more than $60 billion in outstanding obligations from recent bailouts.
Still, the administration appears intent on shoring up Milei. He will meet with Trump and Bessent in New York this week during the United Nations General Assembly.
Milei thanked them publicly, writing on X: “Those who defend the ideas of freedom should work together for the well-being of our people.”
Analysts say Washington’s support could strengthen Milei’s hand ahead of Argentina’s October congressional elections, where his Freedom Advances party is seeking to expand its majority.
Trevor Yates, an analyst at Global X, suggested U.S. backing could “reduce market volatility and in turn bolster Milei’s support ahead of the all or nothing moment.”
For Milei, whose party suffered setbacks in provincial elections this month, the stakes are high. But for Trump, the moment is an opportunity to back a foreign leader who mirrors his own calls for fiscal discipline and a return to prosperity through market freedom.
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