US Doubles Argentina Aid to $40 Billion With Peso Purchases, Private Debt Facility

The United States purchased additional Argentine pesos from open markets on Oct. 15, U.S. Treasury Secretary Scott Bessent said, while pressing forward on a $20 billion private investment pool aimed at Argentine government bonds.

The moves build on a fresh $20 billion currency swap agreement with Buenos Aires that delivers $40 billion in overall backing for the region’s third-largest economy. Bessent offered no specifics on the peso purchases, which follow an earlier purchase on Oct. 9.

The developments helped lift Argentine equities from a slump triggered by President Donald Trump’s remarks on the previous day, in which he said that Washington would avoid “wasting time” on Argentina should President Javier Milei’s La Libertad Avanza lose in the Oct. 26 congressional election.

Following that statement on Oct. 14, domestic indexes closed 1.7 percent higher after surging by more than 4 percent intraday, with global dollar-denominated notes rebounding from previous losses. However, the peso slid by 1.7 percent to 1,378 pesos per dollar following the announcement by Bessent.

Bessent told reporters that aid will depend on sound policy, not any specific administration. Such backing “isn’t tied to any single vote,” Bessent said during a briefing. A victory for Milei’s party, though, would arm the right-wing populist leader with enough seats to block efforts unraveling his laissez-faire, libertarian policies and spending curbs.

“It is policy-specific,” Bessent said. “So as long as Argentina continues enacting good policy, they will have U.S. support.”

Pressed on whether peso efforts might extend to bond acquisitions, Bessent said, “We could,” without elaborating.

Discussions for the debt fund, involving lenders and asset managers, have simmered for weeks as a market-driven fix for Argentina’s bond obligations.

“So it is a private-sector solution to Argentina’s upcoming debt payments,” Bessent said. “Many banks are interested in it, and many sovereign funds have expressed interest in being part of it.”

Argentine Economy Minister Luis Caputo said Milei’s policies would remain regardless of the outcome of the vote on Oct. 26. He also revealed that officials were pursuing other funding avenues.

Few contours have emerged on the swap, which bolsters trading fluidity. Bessent said it draws from International Monetary Fund-issued special drawing rights parked in the Treasury’s stabilization reserve, later to be swapped into dollars.

On claims of superior repayment standing over the International Monetary Fund or bondholders, he said, “No, that’s what China does, we don’t do that.”

In a CNBC appearance on Oct. 15, Milei framed deepening Washington links as a boon for exports.

“We have been discussing how to open up the American market to Argentine products,” he said.

He pledged unwavering resolve on overhauls, brushing off electoral noise.

“I have no intention of changing course until the end of my term,” he said. “In other words, I am committed to the agenda of lowering taxes, deregulating, and keeping the economy growing.”

The overtures signal a broader “economic Monroe Doctrine,” Bessent said, invoking the 1823 tenet to cement U.S. sway in the Western Hemisphere. No contagion fears drive it, he said, but rather Argentina’s role as a “guiding light” against leftist legacies—one whose triumphs might nudge neighbors rightward.

Beijing’s footprint grows across Latin America, including with an $18 billion swap with Buenos Aires. Yet Milei hailed U.S. inflows, spotlighting a $25 billion OpenAI pledge for artificial intelligence ventures and pursuits in minerals, nuclear power, and hydrocarbons.

“Argentina is receiving a lot of investment from U.S. companies,” he said, crediting tax breaks under Argentina’s Incentive Regime for Large Investments initiative that have locked in $20 billion so far, with $60 billion already queued and more from players such as state oil firm YPF and Italian multinational energy company Eni’s $80 billion package.

On the swap’s structure, Milei said: “Just as the swap does not increase Argentina’s debt, it does not increase the United States’ debt either. It is a currency exchange.

“The swap is intended to provide Argentina with the financing to honor its debts. The U.S. Treasury showed that it is even more than that, because it also bought pesos on the foreign exchange market.”

Reuters contributed to this report.