U.S. Treasury Secretary Scott Basant took action on Tuesday to bolster Argentine assets, describing a $20 billion swap arrangement signed the previous day as a “economic stabilization” agreement.

In a post on social media platform X, Basant stated that the agreement reached with Argentina's central bank serves as a “bridge to a better economic future for Argentina, not a bailout plan.”

With Argentine President Javier Milei approaching a critical midterm election this weekend, this arrangement is a key pillar of the U.S. strategy to stabilize this volatile, crisis-prone economy. Over the past two weeks, the U.S. government has directly intervened in the market to support the Argentine peso, an unusual level of support.

“Once the elections are over, U.S. Treasury purchases will dominate the market,” said David Austerweil, deputy portfolio manager at Van Der Emerging Markets. “The scale of resources committed and invested by the U.S. Treasury is substantial.”

Following Basant's post, Argentine dollar bonds reached an intraday high, with 2035 maturing bonds rising nearly 0.5 cents to above 57 cents on the dollar, later narrowing their gains. The peso has been under pressure since Milei's party lost to the Peronist opposition in a provincial election, weakening nearly 0.4% to 1,480 pesos against the dollar.

On October 14, former President Donald Trump met with Javier Milei and other officials at the White House.

The Trump administration views Milei as a staunch ideological ally in the turbulent region.

“We do not want to see any more countries in Latin America collapse; a strong and stable Argentina as a good neighbor clearly serves U.S. strategic interests,” Basant said in a statement, which did not disclose details or amounts of the agreement. The Treasury did not immediately respond to requests for comment.