US Treasury Secretary Pledges Support to Argentina Amid Economic Woes

US Treasury Secretary Scott Bessent has assured Argentina's President Javier Milei that his administration will "do what is necessary" to support the country's economy, amid concerns over the Argentinian peso's sharp decline against the US dollar. Bessent's pledge came after the currency fell by more than 6 percent on Tuesday, forcing the government to sell yet more dollars in the spot market to shore it up.

Key Takeaways:

• US Treasury Secretary Scott Bessent has promised a "large" intervention to help stabilize Argentina's wobbling currency, which has been in a free-fall since mid-September.
• The US administration is considering buying Argentine government bonds in addition to advancing a $20 billion credit line, or loan, to support the embattled economy.
• Bessent's comments initially helped to calm financial markets, with Argentinian bonds due in 2029 increasing in value by 6 cents to reach 71 cents on the dollar.
• The peso's decline has been triggered by growing concerns over President Milei's popular support, which has been eroded by recent setbacks, including a defeat in provincial elections, a corruption scandal, and a loss in Congress.
• US support for Argentina's economy would be the second major bailout for the country under US President Donald Trump, following a $50 billion loan deal in 2018.
• Experts believe that Washington's financial relief will merely postpone a devaluation of the peso until after the mid-term elections in October, with many predicting that the government will be forced to change its exchange-rate scheme to allow the peso to float more freely.
• Inflation risks are on the upside, and if President Milei performs poorly in the elections, the negative political and financial noise would rush back, making a grim scenario for the embattled leader.

Statistics:

• The pawn has fallen by more than 6 percent on Tuesday, forcing the government to sell yet more dollars in the spot market to shore it up.
• The peso's official rate had dropped by nearly 10 percent since mid-September and started to test the upper limits of its exchange-rate band.
• The Argentine central bank spent $1 billion of its foreign exchange to keep the peso below the currency ceiling on September 19.
• Argentina will have to find $10 billion to finance debt payments to the IMF in the first half of 2026.
• In 2018, the US administration agreed to a $50 billion loan deal for Argentina under then-President Mauricio Macri, which later unraveled.

Sources:

• (https://www.aljazeera.com/economy/2024/3/19/first-100-days-milei-falters-on-shock-therapy-for-argentinas-economy)
• (https://www.aljazeera.com/news/2025/9/8/argentinas-milei-suffers-crushing-setback-in-buenos-aires-election)
• (https://www.aljazeera.com/news/2025/8/28/argentinian-president-javier-milei-leaves-rally-after-protesters-throw-rocks)
• (https://www.aljazeera.com/news/2025/4/12/argentina-secures-42bn-from-imf-others-as-it-lifts-currency-controls)
• (https://www.aljazeera.com/economy/2025/9/23/us-pledges-to-do-what-is-needed-to-support-argentinas-economy)
• (https://www.aljazeera.com/economy/2025/7/10/whats-behind-trumps-50-percent-tariff-for-brazil-despite-trade-surplus)