Pecohub US Treasury Secretary Scott Bessent announced on the 9th that the US government has finalized a $20 billion currency swap agreement with Argentina, which is grappling with a foreign exchange crisis.
Following four days of talks with Luis Caputo, Argentina’s Economy Minister, who visited Washington, DC, Bessent posted on X (formerly Twitter), “President Donald Trump’s America First economic leadership is committed to fair trade and strengthening alliances that welcome US investment,” and made the announcement.
Argentine President Javier Milei, who is close to Trump, has even mobilized the unusual measure of a “direct purchase of pesos” to support him.
Bessent stated that day, “Argentina is facing a critical moment of severe liquidity shortages, and the only country that can swiftly resolve this is the United States.
We will act. Today, we directly purchased Argentine pesos and finalized a total currency swap of $20 billion.” A currency swap is a contract that allows two countries to exchange their currencies at a predetermined exchange rate for a set period.
Our government has requested a currency swap from the US in return for tariff negotiations pledging a $350 billion investment in the US, but has received no significant response. In contrast, for South America’s ally Argentina, the currency swap was swiftly concluded based on the personal ties between Trump and Milei.
Bessent added, “The Treasury is ready to immediately take all necessary special measures to stabilize Argentina’s market.
We continue to hear from US business leaders who want to further connect the US and Argentine economies thanks to President Milei’s leadership.” He continued, “The Trump administration is firmly supporting its allies and has also discussed US tools to strongly support investment incentives in Argentina and investments in strategic partners.
A prosperous Argentina aligns with US strategic interests. We look forward to the summit between Trump and Milei on October 14 and to meeting again with Minister Caputo during the IMF Annual Meetings.” During this period, Deputy Prime Minister for Economic Affairs Koo Yun-cheol will also visit Washington, DC, to attend the IMF-WB, the World Bank, Annual Meetings.
Although he met with Bessent last month during the UN General Assembly, there was no notable progress on the currency swap.
The background of the US supporting Argentina, even using the unusual measure of directly purchasing pesos, lies in anxiety that the right-wing government led by Milei—dubbed the “South American Trump” and familiar to the MAGA (Make America Great Again) camp—could collapse amid the economic crisis. Milei is politically cornered, having suffered a major defeat in the Buenos Aires provincial election last month.
Bloomberg reported, “Trump and Bessent aim to help their political ally Milei win the October 26 midterm elections and calm markets anxious about left-wing rivals regaining power.” However, some within the Republican Party have criticized the move, arguing that using taxpayer money to support a foreign government contradicts Trump’s ‘America First’ principle.
