Washington (AFP) – US Treasury Secretary Scott Bessent on Wednesday said he was working to rally the private sector around a new $20 billion “facility” to support Argentina’s embattled economy. “We are working on a $20 billion facility that would be adjacent to our swap line, of private banks and sovereign wealth funds that I think would be more aimed at the debt market,” he told reporters in Washington.
Bessent added that he had spent weeks working on the private-sector solution to Argentina’s upcoming debt payments, which would come on top of the $20 billion US swap line the US Treasury recently set up. “So that would be a total of $40 billion for Argentina,” he said, in remarks that triggered a rebound in Argentine stocks with some shares on the Merval index rising by almost 10 percent.
Bessent’s comments mark the latest round of support from the administration of Donald Trump for Argentina’s right-wing populist leader Javier Milei, who faces an uphill battle in crucial midterm elections later this month. Milei enacted sweeping budget cuts after taking office in 2023 in a bid to quell inflation and turn the Argentine economy around, drawing fierce opposition and widespread protests.
Last week, Bessent confirmed the Treasury had set up the $20 billion swap line with Buenos Aires, adding that it had already begun purchasing Argentine pesos to help support the currency on global markets. And on Tuesday, President Donald Trump hosted Milei at the White House, and threw his support behind him ahead of the elections. “If he loses, we are not going to be generous with Argentina,” he warned.
The strong US showing of support for Argentina this week has unfolded on the sidelines of the annual meetings of the International Monetary Fund (IMF) and World Bank in Washington. The IMF, which has its own multi-billion dollar loan program with Buenos Aires, has supported America’s bilateral assistance for Argentina’s economy.
In a broadcast interview on Wednesday, Milei said he was confident of US financial support so long as he remains in office, and vowed to maintain his libertarian agenda. “We continue to advance the ideas of freedom, so at least until 2027 we have that support assured,” he said, according to the dubbed-over voiceover of an English interpreter.
Milei, an economist, voiced hope that the legislative elections would increase his base to allow him to pursue his policies. “I have no intention of changing course until the end of my term,” he said. “I am committed to the agenda of lowering taxes, deregulating and keeping the economy growing.”
Bessent said Milei would continue to enjoy US support for as long as he had a veto on legislation in parliament. “It is not election-specific, it is policy-specific,” he said. “So as long as Argentina continues enacting good policy, they will have US support.”
© 2024 AFP
