U.S. Treasury Intervenes to Stabilize Argentine Peso Amid Political Tensions

The U.S. Treasury has implemented a $20 billion currency swap framework with Argentina, purchasing pesos to stabilize the nation's wavering economy, fulfilling President Donald Trump's promise. This strategic move, led by U.S. Treasury Secretary Scott Bessent, resulted in a sharp rise in Argentine peso and dollar bonds.

The action follows four days of meetings between Bessent and Argentine Finance Minister Luis Caputo, involving the International Monetary Fund. IMF Director Kristalina Georgieva commended the U.S.'s actions, highlighting alignment with Argentina's economic program of fiscal discipline and robust foreign exchange policies for reserve accumulation.

This intervention is partially designed to strengthen the position of Argentine President Javier Milei's party in upcoming midterm elections, amid challenges of public opposition to austerity measures. Critics, including U.S. Senate Democrats, decry the intervention as financially imprudent during a U.S. government shutdown.

(With inputs from agencies.)