Argentina, Milei averts financial crisis with 20 billion US aid

With a sigh of relief, Argentina avoids yet another financial crisis. President Javier Milei,without a chainsaw but with hat in hand, gets help from the US Treasury. Treasury Secretary Scott Bessent throws a 20-billion-dollar bailout to the Casa Rosada and especially to the Central Bank of Argentina, which will be able to rescue the ongoing currency crisis. Bessent chose to paraphrase the announcements made by Trump on Tuesday. On X he writes: "The United States is ready to buy back some of Argentina's dollar-denominated debt, and will do so if conditions require it." "As President Trump said, we are ready to do whatever it takes to support Argentina and the Argentine people," Bessent said.

'Argentina has the necessary tools to defeat speculators, including those who seek to destabilise the markets for political objectives. I have also been in contact with a number of US companies that intend to make large foreign direct investments in various sectors in Argentina if the elections are successful,' says Bessent.

"The Trump administration is steadfast in its support for US allies, and President Trump has given" Milei "a rare endorsement for a foreign leader, demonstrating his confidence in his government's economic plans and the strategic geopolitical importance of the US-Argentina relationship," the Treasury secretary added, concluding, "I will follow developments closely. The Treasury remains fully prepared to do what is necessary'.

On the Argentine front, Argentine Economy Minister Luis Caputo merely stated that the US and Argentine teams 'are working together'. He continued: 'I don't know if the Secretary (of the Treasury Scott Bessent) will make an announcement or not. I will stick to the schedule. We will not announce anything until it is final for us,' he stressed, assuring that the US 'has not asked for anything in return' for its support. In the past three months, the Argentine currency has lost over 17% of its value against the dollar. In recent days, despite promises of US support, the peso has recovered almost 7%.

The crisis in Argentina has deepened in recent weeks. Social tensions are joined by currency tensions: the Argentine peso in free fall, with investors fleeing from Argentine stocks and bonds, since the Peronist opposition inflicted a double-digit defeat on Milei's party, La Libertad Avanza, in provincial elections in Buenos Aires in early September. The corruption scandal involving Karina Milei, the president's sister and chief advisor, and the three parliamentary votes by which Milei's vetoes of measures to restore funds he cut for health and education were overridden, have generated a climate of widespread mistrust.