The United States has signaled it may take sweeping measures to help Argentina stabilize its economy, following weeks of financial stress and political unease. Treasury Secretary Scott Bessent said Monday that “all options are on the table,” including the use of dollar swap lines, direct currency purchases, and support from the Treasury’s Exchange Stabilization Fund (ESF).
Speaking to reporters in Washington, Bessent emphasized that any action would be “large and forceful” but would not be finalized until after President Donald Trump meets Argentine President Javier Milei in New York. The two leaders are scheduled to confer on the sidelines of the United Nations General Assembly.
Markets responded swiftly to the news. Argentine stocks traded in the United States rose by more than 10 percent on Monday, while the peso gained ground after a prolonged slide. International bonds, which had fallen more than 20 percent this year, also rebounded. The move provided breathing space for Milei’s administration as it faces mounting investor doubts and an approaching midterm election.
Milei, elected in 2023 on a libertarian platform, has pursued sweeping fiscal and monetary reforms aimed at curbing runaway inflation and balancing government accounts. His team achieved a budget surplus earlier this year, drawing praise from U.S. officials. Still, political setbacks—including corruption allegations involving his sister and unexpected defeats in local elections—have fueled skepticism about his ability to sustain support for austerity.
Bessent stressed that any U.S. intervention would not require new conditions beyond Argentina’s commitments under its current $20 billion loan arrangement with the International Monetary Fund. “The United States is ready to do what is needed to help a key ally in Latin America,” he wrote in a social media post announcing the initiative.
The ESF, created during the Great Depression, has been used at various points to calm financial markets, including support for Mexico in 1994, Brazil in 1998, and Uruguay in 2002. More recently, it backed emergency facilities during the 2008 financial crisis and the 2020 pandemic. While its assets exceed $200 billion, experts estimate that roughly $30 billion is readily available for foreign exchange support—still more than enough to impact Argentina’s relatively small financial system.
Analysts caution, however, that a short-term injection may not resolve Argentina’s deeper challenges. The peso is widely seen as overvalued, and a meaningful correction could drive inflation higher, eroding household incomes. “The question is whether external help simply finances capital flight or gives the government space to adjust policy,” said Mark Sobel, a former senior Treasury official.
For Milei, U.S. backing offers both financial and political benefits. In addition to the immediate boost for markets, the show of confidence from Washington underscores his alignment with Trump, who has praised Milei’s commitment to market reforms. Yet at home, the president faces rising anger over subsidy cuts, wage pressures, and the prospect of fresh price spikes if the exchange rate is adjusted.
With Argentina’s midterm elections approaching in October, the coming weeks will test whether international support can steady both the economy and Milei’s political footing. Investors, meanwhile, are watching closely to see if Washington follows words with action once the leaders meet in New York.
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