MW Treasury Secretary Bessent unveils $20 billion 'bazooka' to try to stem Argentina's financial crisis

By Greg Robb

The Trump White House is asserting a 'zone of influence' in Latin America to counter China, economist says

(From left) Treasury Secretary Scott Bessent, Secretary of State Marco Rubio and U.S. Ambassador to the U.N. Michael Waltz listen as President Donald Trump delivers remarks to the United Nations General Assembly on Wednesday.

Treasury Secretary Scott Bessent on Wednesday gave more details on how the White House plans to use government funds to help embattled Argentina President Javier Milei.

Earlier this week, Bessent labeled Argentina a "systemically important ally" and said all options were on the table to help the country battle a currency crisis. That helped stabilize Argentine financial markets.

In a post on X, Bessent gave more specifics about the options under discussion, saying the U.S. was in talks with Argentine officials for a $20 billion swap line that would give the South American country access to scarce U.S. dollars.

In addition, the Treasury stands ready to buy Argentina's dollar bonds "and will do so as conditions warrant," he added, with the U.S. also ready to purchase secondary debt.

Bessent said the U.S. will prepared to deliver standby credit to Argentina through its Exchange Stabilization Fund.

Mark Sobel, a former Treasury official and now U.S. chairman of the Official Monetary and Financial Institutions Forum, said this was an attempt at a "bazooka" to ward off any further financial crisis.

The Milei government has been politically unpopular and is facing key midterm elections in late October.

"I hope this attempt at a bazooka will only extend the 'swap' through the elections, have an assured source of repayment, perhaps tie up a chunk of the resources and be linked to firm understanding on how Argentina will float/achieve a competitive valuation of the peso," Sobel said in a post on X.

"Twenty billion dollars for a swap line is a lot of money," said Monica de Bolle, a senior fellow at the Peterson Institute for International Economics. "It will provide them with some relief so they can navigate from now to the elections on Oct. 26."

In an interview on the Fox Business Network, Bessent said the U.S. was "not going to let a disequilibrium in the market be a cause of a backup in his [Milei's] substantial economic reforms," Bessent said.

The Treasury Secretary said the market hasn't lost confidence in Milei but is skittish because of the country's poor track record.

"It is very hard to believe that it is different this time but I believe, with President Milei, it is," Bessent said.

Bessent tried to give the Argentine president a boost by saying "numerous" U.S. companies would invest in Argentina if there was a "positive election outcome."

In his own post on X, Milei thanked President Donald Trump and Bessent for their support, ending it by saying "MAGA!"

The Trump administration's moves in Argentina show that it is trying to create "a zone of influence" in Latin America to counter the rise of China in the region, De Bolle said.

The U.S. government's strategy is to keep Argentina afloat to maximize the chances that Milei's supporters can win the election, she said - adding that this is "a longshot " because Milei has been dogged by a corruption scandal involving his sister.

The elections are crucial for Milei because he needs political support within Congress to build on his reform efforts, she noted.

Argentina suffers from having an economy that functions with dollars and pesos. Every time there is a dollar shortage, they fall into a spiral of exchange-rate devaluations and inflation, De Bolle said.

"No one has a plan for the day after" the election if Milei's party suffers, she added. Milei faces re-election in 2027.

After soaring on Monday, Argentine financial assets ARGT $(BBAR)$ $(GGAL)$ $(BMA)$ rose higher after Bessent's post on Twitter.

The Argentine peso (USDARS) (ARSUSD) continued to trend higher this week.

-Greg Robb

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September 24, 2025 13:00 ET (17:00 GMT)

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