U.S. Boosts Economic Support for Argentina Amid Political Shifts
The U.S. Treasury, led by Scott Bessent, is negotiating a $20 billion swap line with Argentina’s central bank to bolster its economy. They plan to buy Argentine dollar-denominated bonds and offer standby credit, alongside potential foreign investments pending election outcomes, as President Milei's party seeks electoral gains.
The United States is extending a significant lifeline to Argentina by negotiating a $20 billion swap line with its central bank. U.S. Treasury Secretary Scott Bessent announced on Wednesday that they stand poised to support the South American nation by purchasing Argentina's U.S. dollar-denominated bonds and providing substantial standby credit via the Exchange Stabilization Fund.
Bessent, leveraging his experience as a former hedge fund executive, expressed readiness to assist further by purchasing government debt. He also noted potential major foreign direct investments from U.S. firms, conditional on a favorable electoral atmosphere as Argentina prepares for midterm elections on October 26. The announcement sent Argentine assets soaring and brought a notable appreciation of its peso currency, reversing a previous downturn.
The political landscape remains tense, with President Javier Milei's party grappling with electoral challenges and a need for economic reforms. Despite past mismanagement memories haunting the markets, Bessent affirms U.S. support for Milei's agenda, underscoring a commitment to stabilizing and revitalizing Argentina amid international concern about its economic trajectory.
(With inputs from agencies.)
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