The United States of America is negotiating a $20 billion currency swap credit line for Argentina's central bank. This is aimed at stabilizing the country's financial system and also provides for the possibility of buying back Argentina's dollar bonds.
US Treasury Secretary Scott Bessent stated that the United States of America is negotiating to open a credit line in the form of a $20 billion currency swap to Argentina's central bank to stabilize the country's financial system. This is reported by Reuters, writes UNN.
Details
Bessent said the US was prepared to buy back Argentina's dollar-denominated bonds and would do so if circumstances required it. The US also plans to provide a significant reserve loan through the Exchange Stabilization Fund.
Argentina has the tools to resist speculators, including those who try to destabilize its markets for political reasons. I am closely monitoring developments, and the Treasury Department remains fully prepared to take necessary action.
– he said.
Bessent, a former hedge fund executive, also said the US was prepared to buy back Argentine government debt in the primary or secondary market and was working with the country's government to end tax breaks for raw material exporters who convert foreign currency.
He added that many American companies had informed him of their intention to make "significant direct foreign investments" in various sectors of the Argentine economy "in the event of a positive election outcome," but provided no details.
Addition
Argentina will vote on October 26 in midterm parliamentary elections, where President Javier Milei's right-conservative party is trying to gain more seats to strengthen its position.
Argentina's assets surged on Wednesday after Bessent unveiled details of previously promised support for Latin America's third-largest economy and Milei, a close ally of President Donald Trump.
Argentina's national currency, the peso, strengthened this week after a sharp drop last week, when the country's central bank spent more than $1 billion in reserves to support it.
Markets were rattled after Milei's party suffered an unexpected defeat in local elections in Buenos Aires, signaling growing discontent with austerity policies and raising fears of further reforms.
Trump said on Tuesday that he supports Argentina but does not believe it needs a financial bailout.
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