In a move that has both stunned financial markets and ignited fierce political debate, the United States Treasury announced on October 9, 2025, that it had directly purchased Argentine pesos and finalized a sweeping $20 billion currency swap framework with Argentina’s central bank. The deal, confirmed by Treasury Secretary Scott Bessent after four days of intensive negotiations in Washington with Argentina’s Economy Minister Luis Caputo, marks one of the largest direct currency operations by the U.S. in recent decades, signaling a bold intervention in Latin America’s economic affairs.
The timing couldn’t have been more critical—or more politically charged. Argentina’s right-wing libertarian President Javier Milei, a self-styled disciple of Reaganomics and a close ally of U.S. President Donald Trump, has been grappling with a battered economy and looming midterm elections on October 26. Following the announcement, Milei was quick to express his gratitude, hailing the agreement as a turning point for the continent. “Together, as the closest of allies, we will make a hemisphere of economic freedom and prosperity,” Milei wrote in a social media post, thanking both Trump and Bessent for their “powerful leadership and steadfast support.”
According to AFP, the U.S. Treasury’s intervention comes as Argentina faces what Bessent described as “a moment of acute illiquidity.” In a statement posted on X, Bessent declared, “U.S. Treasury is prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets.” He emphasized the urgency of the situation and the exceptional nature of the U.S. response, adding, “To that end, today we directly purchased Argentine pesos. Additionally, we have finalized a $20 billion currency swap framework with Argentina’s central bank.”
The deal was met with immediate optimism in Argentina’s financial markets. The Buenos Aires stock exchange soared by 15%, and dollar-denominated bonds surged 10% on the news, providing a rare dose of good news for a country beset by economic turmoil. Caputo, Argentina’s economy minister, said the deal would provide much-needed “breathing room” for the country’s financial system, which has been teetering on the brink of collapse for much of the year.
Argentina’s economic woes are hard to overstate. The nation’s annual inflation rate remains staggering, hovering around 200% as of late 2025, even though monthly inflation has declined significantly in recent months. After years of monetary financing of deficits, Milei’s government implemented harsh austerity measures and export reforms, which have helped nudge foreign reserves upward and narrow the trade deficit for the first time in over two years. Still, the peso continues to lose value in parallel markets, unemployment is on the rise, and the poverty rate, though slightly improved in late 2024, remains painfully high.
For Milei, the U.S. credit line offers both financial and political lifelines. With the midterm elections just weeks away, the infusion of dollar liquidity could slow capital flight, temporarily strengthen the peso, and buy time for his reform agenda to take hold. The political calculus, however, has not gone unnoticed in Washington. Several analysts, cited by Tekedia, have suggested that the timing and scale of the support look less like a purely financial intervention and more like a political reward, intended to shore up Milei before the polls and reinforce Trump’s ideological influence in the region.
The move has drawn sharp criticism from Democratic lawmakers and U.S. farmers, who accuse the Trump administration of hypocrisy for aiding a foreign government while domestic issues remain unresolved. Senator Elizabeth Warren, leading the opposition, introduced the “No Argentina Bailout Act” on the very day of the announcement. The proposed legislation would prevent the Treasury from using its Exchange Stabilization Fund to assist Argentina. Warren minced no words, stating, “It is inexplicable that President Trump is propping up a foreign government while he shuts down our own. Trump promised ‘America First,’ but he’s putting himself and his billionaire buddies first and sticking Americans with the bill.”
U.S. farmers have also voiced their frustrations, particularly in light of Argentina’s recent suspension of soybean export taxes—a move that, according to Democratic lawmakers, has undercut U.S. farmers already facing stiff competition in the global market. The administration’s critics argue that the financial help to Argentina is at odds with Trump’s “America First” agenda, demanding greater transparency and justification for such an extraordinary commitment of U.S. resources abroad.
Bessent, for his part, has pushed back against the notion that the currency swap constitutes a bailout. Speaking to CNBC earlier in October, he clarified, “As far as what the U.S. is doing, just to be clear, we are giving them a swap line. We are not putting money into Argentina.” He reiterated on Thursday that “the success of Argentina’s reform agenda is of systemic importance” and that a stable Argentina “which helps anchor a prosperous Western Hemisphere is in the strategic interest of the United States.” Bessent has argued that supporting Argentina should be a bipartisan priority, given the broader implications for regional stability and the global economy.
The International Monetary Fund has also weighed in, with IMF chief Kristalina Georgieva praising the U.S. move on X. She noted that the IMF, which had already agreed in April to a $20 billion loan for Buenos Aires, is “fully aligned in support” of Argentina’s “strong economic program.” The IMF’s backing adds an extra layer of legitimacy to the deal, though many observers remain skeptical about the long-term prospects for Argentina’s recovery.
Notably, the U.S. Treasury’s intervention comes after a period of shifting political winds across South America. Bessent remarked earlier this month that “many governments in South America moved from far-left to center-right. We did not support them, and then they took a hard lurch to the left.” He called Argentina a “beacon,” suggesting that its current trajectory could serve as a model for other countries in the region.
Looking ahead, Bessent has indicated that he will meet again with Caputo next week during the annual meetings of the International Monetary Fund and World Bank in Washington. Meanwhile, Trump and Milei are expected to hold a high-profile meeting just weeks before Argentina’s pivotal midterm elections, underscoring the deepening ties between the two administrations.
For now, the partnership between Washington and Buenos Aires has bought Argentina some valuable time—and perhaps a little hope. Whether this extraordinary intervention will stabilize the crisis-plagued economy or merely postpone another reckoning remains the question on everyone’s mind.