Adds bullets, comments from Bessent, Caputo in paragraphs 3 and 12-13

By Walter Bianchi

BUENOS AIRES, Jan 9 (Reuters) - Argentina has repaid the United States for a currency swap framework it provided to the South American country last year to stabilize its economy, U.S. Treasury Secretary Scott Bessent and Argentina's central bank said on Friday.

"I am pleased to announce that, reflecting its strengthened financial position, Argentina has both quickly and fully repaid its limited draw on the swap facility with the United States, such that the Exchange Stabilization Fund currently does not hold any pesos," Bessent said in a post on X.

"We look forward to continuing our enthusiastic support of President Milei and Argentina," he added.

In a separate post, Argentina's central bank added that it had settled the swap line in December, two months after it was announced.

DEAL SIGNED JUST AHEAD OF ELECTION

According to local newspaper La Nacion, $2.5 billion of a possible $20 billion had been used in that time.

A source with knowledge of the matter told Reuters the agreement remained in force under the agreed terms.

The agreement was signed days ahead of a midterm election amid concerns about Argentina's struggling economy. The swap line provided a safety net of dollars that the central bank could use to help prop up the value of the peso and prevent a devaluation ahead of the vote.

The funds were used in October to pay back debt to the International Monetary Fund and to return foreign currency that had been used to support the exchange rate in the days leading up to the election.

Libertarian President Javier Milei, an ally of U.S. President Donald Trump, succeeded in extending his influence in the country's legislatures. Washington had signaled it would condition its financial support of Argentina on the outcome of the election.

But the swap line drew backlash in the U.S., with critics calling the move a bailout and arguing it disadvantaged U.S. agricultural exports against competition from Argentina for the Chinese market.

Bessent said in late October there would be no taxpayer losses and that Washington was looking to use its economic power to shore up a friendly government.

Argentine Economy Minister Luis Caputo thanked Bessent and Trump for their "swift response to blatant attacks whose sole purpose was to destabilize our government at a time when our most committed people are focused on long-term change."

Milei's administration had blasted congressional opposition to his policy agenda, protests and a corruption scandal that emerged in the runup to the election as political attacks.

(Reporting by Walter Bianchi in Buenos Aires, Ryan Patrick Jones in Toronto, Iñigo Alexander in Mexico City and Gabriel Araujo in Sao Paulo; Writing by Sarah Morland; Editing by Susan Heavey, Kirsten Donovan, Rod Nickel)

((ryan.jones@thomsonreuters.com;))