US Treasury chief issues second message of support for Milei's Argentina

US Treasury Secretary Scott Bessent says Washington is "fully prepared to do what is necessary" in support of Argentina, a week after revealing both sides were in talks over an economic aid programme.

Bessent said in a new social media post that he had a "very positive call" with Argentina's Economy Minister Luis Caputo on Wednesday, adding that further talks were planned in Washington.

"In the coming days I look forward to Minister Caputo's team coming to [Washington] D.C. to meaningfully advance our discussions in-person regarding options for delivering financial support," Bessent wrote on X.

Argentina is facing a period of currency turbulence ahead of midterm elections next month, with the peso slumping against the dollar.

Bessent did not give a precise date for the meeting with Caputo, but Argentina’s economy minister is expected to travel to Washington for the upcoming annual meetings of the International Monetary Fund and World Bank, which begin October 13.

President Javier Milei is scheduled to visit the White House on October 14.

"During yesterday's [Wednesday] discussions with my fellow G7 finance ministers, I emphasised the importance of the success of President Milei's economic policies for the people of Argentina, for the region and for the G7," added Bessent.

The Treasury chief’s post was made just prior to the opening of markets in Argentina on Thursday. In morning trading, the peso improved against the dollar after losing almost five percent of its value the previous day.

‘Swap line’

Last week, Bessent said the Treasury Department was negotiating with Argentine officials on "a US$20-billion swap line," buoying the nation's markets and President Javier Milei’s government.

Milei, a close ally of US President Donald Trump, is struggling to ease market jitters ahead of midterm elections that could determine the future of his austerity agenda.

In an interview Thursday, Bessent confirmed a currency swap was on the cards.

"Let me be clear about this: we are giving them a swap line, we are not putting money into Argentina," Bessent said.

Bessent acknowledged that the aid should provide decisive support ahead of Argentina's October 26 election.

"We are confident that Milei will do well," he said.

Last week, the Treasury chief had said that Washington was prepared to deliver "stand-by credit" from the Treasury's Exchange Stabilization Fund and could buy Argentina's dollar-denominated bonds, among other measures.

Bessent told CNBC that Washington was "maintaining a US strategic interest in the Western Hemisphere" when it came to helping Argentina.

"Many of the governments down there moved from far-left to centre-right. We did not support them and then they took a hard lurch to the left," Bessent said.

"And now, Argentina is a beacon down there, and there's a chance now for many other countries to come along – Bolivia, Ecuador, I think, Colombia – after the elections," he said. "So, what you don't want are these failed economic models."