U.S. Treasury's $20 Billion Lifeline to Argentina Spurs Market Surge

The U.S. Treasury, led by Scott Bessent, has finalized a $20 billion currency swap agreement with Argentina and purchased pesos, leading to a significant rise in Argentine stocks and bonds. This action fulfills President Donald Trump's promise to stabilize Argentina's wavering economy.

Following meetings with Argentine Finance Minister Luis Caputo and the IMF, Bessent emphasized the swap is not a bailout but aims to enhance U.S. strategic interests, particularly in deterring Chinese influence and encouraging U.S. involvement in Argentine mineral resources. Democratic U.S. lawmakers criticized this measure, stating it supports a foreign government over domestic priorities.

The financial support is poised to bolster President Milei's party ahead of Argentina's October legislative elections. His administration seeks to reduce government spending and increase private-sector investment. The U.S. backstop could influence Milei's electoral success despite public resistance to austerity measures.

(With inputs from agencies.)