U.S. Treasury Secretary Scott Bessent has affirmed that the United States stands “ready to do what is needed” to assist Argentina amidst escalating financial instability.
“All options for stabilization are on the table,” Bessent stated via social media, recognizing Argentina as a “systematically important U.S. ally in Latin America.”
This announcement has contributed to calming financial markets, which have been unsettled by recent election setbacks that have cast doubt on the future of President Javier Milei’s austerity-focused, free-market agenda.
The Argentine peso has been experiencing a decline in value, accompanied by investor sell-offs of Argentine stocks and bonds.
Milei, a libertarian economist and ally of former U.S. President Donald Trump, was elected president in 2023, campaigning as an outsider who pledged to curb soaring inflation through radical spending cuts and reforms.
Maintaining a stable Argentine peso is central to this commitment.
However, the currency has weakened as investors move capital out of the country, partly due to concerns about the government’s ability to stabilize the peso.
In recent weeks, the Argentine central bank has intervened to mitigate further weakening of the peso.
This effort, which included the expenditure of $1.1 billion in reserves to purchase pesos last week, has also depleted the country’s holdings, potentially weakening its ability to meet debt obligations.
Bessent indicated that the U.S. government is considering intervention measures, including purchases of Argentine pesos and dollar-denominated government debt, among other forms of support.
He added that further details would be disclosed following a meeting between President Trump and President Milei in New York on Tuesday.
“We remain confident that [President Milei’s] support for fiscal discipline and pro-growth reforms are necessary to break Argentina’s long history of decline,” he stated.
President Milei expressed “enormous gratitude” for the U.S. pledge of support, which contributed to a rise in Argentine stocks and the prices of the country’s dollar-denominated debt in financial markets.
“Those of us who defend the ideas of freedom must work together for the welfare of our peoples,” he posted on social media.
President Milei was the first foreign leader to meet with President Trump after the November 2024 U.S. presidential election, and his economic policies have garnered admiration among many conservatives in the U.S., including Elon Musk.
However, he has faced challenges domestically, particularly in recent weeks, as his government has experienced losses in recent local elections and a bribery scandal involving his sister, who is accused of receiving kickbacks from pharmaceutical companies seeking government contracts.
Argentina is scheduled to hold national mid-term elections in October, which are anticipated to serve as a referendum on his controversial policies, including cuts to social programs such as transportation subsidies.
In April, Secretary Bessent also provided key backing to help Argentina secure a new $20 billion four-year loan from the International Monetary Fund.
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