Washington (AFP) – US Treasury Secretary Scott Bessent said Thursday that his agency was “fully prepared to do what is necessary” in support of Argentina, a week after revealing both sides were in talks over an economic aid program. Argentina’s right-wing President Javier Milei, a close ally of US President Donald Trump, had been struggling to halt market turbulence since a stinging defeat in Buenos Aires provincial elections seen as a bellwether for upcoming mid-terms.
Last week, Bessent announced that he was in talks with Buenos Aires on a $20 billion program of support to end a run on the Argentine peso. That announcement, which followed a meeting between Trump and Milei in New York, caused the peso to rally, but in the absence of new details on the US rescue plan, the currency slumped again this week. Bessent moved to reassure markets on Thursday, saying on social media that he had a “very positive call” with Argentina’s Economy Minister Luis Caputo the day before and adding that further talks were planned in Washington.
“In the coming days I look forward to Minister Caputo’s team coming to D.C. to meaningfully advance our discussions in-person regarding options for delivering financial support,” Bessent wrote on X. His remarks helped stabilize the peso, which was trading at 1,450 to the dollar on Thursday, unchanged from Wednesday, but down nearly 5 percent since the start of the week. Milei, who took office in December 2023 on a promise to revive the economy by shrinking the state, has made strengthening the perenially ailing peso a central plank of his campaign in the October 26 midterm elections. A defeat for his La Libertad Avanza party could further constrain his ability to get his cost-cutting reforms through Congress.
– ‘Lurch to the left’ – Last week, Bessent said the Treasury Department was negotiating with Argentinian officials on “a $20 billion swap line.” The package he outlined also included the possible purchase of Argentine USD bonds and a credit line from the US Treasury, details of which, including the amount, remain unknown. On Thursday, 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 center-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.”
© 2024 AFP
