US says Argentina has 'fully repaid' pre-election currency lifeline

US Treasury Secretary Scott Bessent announced Friday that Argentina has fully repaid an emergency currency loan that generated "tens of millions" in profit for American taxpayers while stabilising a key regional ally.

In a social media post, Bessent praised President Javier Milei's economic reforms and said the successful intervention demonstrated that US President Donald Trump's "Peace Through Economic Strength" policy was at work in Latin America.

Argentina faced a severe liquidity crisis in October with the value of the peso plummeting as investors lost faith in the economy.

This prompted the United States to provide emergency dollar funding through a currency swap from the US Treasury's Exchange Stabilization Fund that effectively propped up the value of the peso, averting a financial crisis.

"Argentina has successfully re-accessed financial markets and has made encouraging changes to its monetary and exchange rate policy framework," Bessent wrote.

The US Treasury no longer holds any Argentine pesos, he added.

Coming days ahead of a key election, the crisis intervention supported Trump ally Milei, a libertarian economist who took office in December 2023 and has implemented sweeping reforms to address Argentina's chronic budget deficits and hyperinflation.

Bessent noted that the Exchange Stabilization Fund "has never lost money" and praised international support for Argentina's reforms, including an existing International Monetary Fund programme.

"Only the United States could act as swiftly as we did in October to preserve market and exchange rate stability," he said.

The assistance to Argentina reflects the Trump administration's broader engagement in Latin America, highlighted most dramatically by the recent US removal of Venezuelan president Nicolás Maduro.

– TIMES/AFP