The United States "injects" $20 billion into Argentina! Bessent announces U.S. Treasury intervention in Argentina's foreign exchange market, peso rises.

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The U.S. government has taken key measures to support Argentina’s economic reforms, not only finalizing a $20 billion currency swap framework, but also directly intervening in the market to purchase pesos.

On October 9, U.S. Treasury Secretary Besent revealed via social media that the U.S. Treasury had directly purchased Argentine pesos on the spot market. He stated that this move was to "act quickly" in support of President Milei’s ongoing economic reform agenda.

At the same time, Besent announced that the $20 billion currency swap framework between the U.S. and the Argentine central bank has also been finalized. These actions clearly demonstrate that the White House is deploying funds to support its political ally, with Besent describing Milei’s reform agenda as "of systemic importance."

Boosted by this news, Argentina’s sovereign bonds due in 2035 rose 4.3 cents to over 60 cents, reaching the highest level in two weeks. The peso closed up 0.7% against the U.S. dollar, reversing an earlier loss of up to 2.7%.

Swap Framework and Direct Intervention

The U.S. Treasury has concluded four days of intensive meetings in Washington with Argentine Economy Minister Luis Caputo and his team. The core outcome was the finalization of the $20 billion currency swap framework agreement.

Besent emphasized:

The U.S. Treasury is ready to take any necessary extraordinary measures immediately to provide stability to the market.

Beyond the swap agreement, the direct market intervention by the U.S. Treasury is even more noteworthy. Besent made it clear:

Today we directly purchased Argentine pesos.

According to reports, this move is considered a direct intervention by the U.S. Treasury in Argentina’s foreign exchange market. Besent stated that Argentina is facing "severe liquidity shortage," adding, "Only the U.S. can act quickly. And we will."

Strong Political Endorsement

Besent’s statement was full of strong signals of political support.

He emphasized that President Trump’s "America First" economic leadership is committed to strengthening allies that welcome fair trade and U.S. investment. He stated:

President Milei’s leadership has made American business leaders eager to tie the economies of the U.S. and Argentina more closely together.

Besent positioned the success of Argentina’s reform agenda as "of systemic importance," and viewed a strong and stable Argentina as in the U.S. strategic interest and helpful for consolidating prosperity in the Western Hemisphere.

He also revealed that he discussed Argentina’s investment incentives and U.S. tools for supporting strategic partner investment with Minister Caputo.

Although the U.S. stance is very positive, there are also potential risks. Some critics warn that the Argentine peso is overvalued. In this situation, if the peso depreciates in the future, U.S. taxpayers participating in the currency swap could suffer losses.

However, Besent affirmed Argentina’s economic policies. He pointed out that Argentina’s policies are based on fiscal discipline, are sound, and that the exchange rate band is still "fit for purpose."

He also mentioned that Minister Caputo briefed him on Argentina’s close coordination with the International Monetary Fund regarding its program commitments.

Looking ahead, Besent stated that he looks forward to President Trump’s meeting with President Milei on October 14, and will meet again with Minister Caputo during the IMF annual meeting. Analysts believe these high-level interactions suggest that economic cooperation and political coordination between the two countries will continue to deepen.

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