US Treasury in talks with Argentina's Central Bank for $20B swap line deal

By Mucahithan Avcioglu

ISTANBUL (AA) – The US Treasury is in negotiations with Argentinian officials for a $20 billion swap line deal with its Central Bank, as the US seeks to support President Javier Milei's government financially ahead of challenging legislative elections, said the US Treasury secretary on Wednesday.

"Yesterday, President Donald Trump and I spoke extensively with President Javier Milei and his senior team in New York. As President (Donald) Trump has stated, we stand ready to do what is needed to support Argentina and the Argentine people," Bessent wrote on US social media company X.

He emphasized that under Milei, Argentina has taken "important strides" toward stabilization. "He has achieved impressive fiscal consolidation and a broad liberalization of prices and restrictive regulations, laying the foundation for Argentina’s historic return to prosperity."

Stating that the US Treasury stands ready to buy Argentina’s US dollar bonds and will do so as conditions warrant, Bessent said that they have been in active talks with Milei's team and are ready to provide "significant" stand-by credit through the Exchange Stabilization Fund.

"In addition, the United States stands ready to purchase secondary or primary government debt and we are working with the Argentine government to end the tax holiday for commodity producers converting foreign exchange," Bessent noted.

He stated that Argentina has the tools to defeat speculators, including those who seek to destabilize Argentina’s markets for "political objectives."

"I have also been in touch with numerous US companies who intend to make substantial foreign direct investments in Argentina multiple sectors in the event of a positive election outcome," Bessent said.

He emphasized that the Trump administration is "resolute" in its support of American allies, and Trump has endorsed Milei, "a rare" foreign official, demonstrating his faith in his government's economic plans and the geopolitical strategic significance of the US-Argentina relationship.

"Immediately after the election, we will start working with the Argentine government on its principal repayments," Bessent added.

Trump endorsed Milei on Tuesday ahead of the country’s October elections. "I'm doing something I don't often do ... I'm giving my full endorsement to him," Trump said during their meeting on the sidelines of the UN General Assembly in New York.

The endorsement came as Milei faces challenging legislative elections on Oct. 26, with half the Chamber of Deputies and one-third of Senate seats up for grabs.

Milei's La Libertad Avanza party recently suffered a significant defeat in Buenos Aires provincial elections, securing only 33.8% compared to the Peronist opposition's 47%.

Bessent said Monday that the Treasury "stands ready" to support Argentina, calling it "a systemically important US ally in Latin America" with "all options for stabilization on the table."