Argentina-US deal: Buenos Aires formalises $20 billion currency swap pact with Washington; Javier Milei gets pre-poll boost
Argentina’s central bank on Monday formalised a $20 billion currency swap agreement with the United States in a move aimed at “contributing to Argentina’s economic stability,” the bank said in a statement. The accord, backed by the administration of US President Donald Trump, comes just days before Argentina’s mid-term elections on October 26 and is seen as crucial support for President Javier Milei, who faces mounting pressure over the country’s struggling economy.According to Bloomberg, the agreement aims to strengthen Argentina’s international reserves, preserve price stability, and promote sustainable economic growth. The deal includes specific terms and conditions to ensure bilateral financial cooperation between the two nations.The Argentine peso has been highly volatile in recent weeks, unsettling households and businesses amid fears of further depreciation. Inflation, which had briefly eased after Milei took office in December 2023, has again been climbing month-on-month, undermining confidence in his economic management, reported news agency AFP.Last week, US treasury secretary Scott Bessent also announced plans to secure an additional $20 billion facility through “private banks and sovereign wealth funds” to reinforce Argentina’s finances. Earlier, Argentina’s economy minister Luis Caputo had told a panel at the Atlantic Council that the government hoped to finalise the framework “very soon,” ideally before the midterm vote. “Hopefully we’ll very soon be able to execute the framework and agreement that will contain the terms of the swap,” Caputo said, alongside Central Bank President Santiago Bausili, according to news agency Reuters.Trump, who hosted Milei at the White House recently, tied US financial support to the outcome of the Argentine elections. “If he loses, we are not going to be generous with Argentina,” Trump warned, as quoted by AFP. His remarks sent jitters through Argentine markets, where traders interpreted the aid as politically conditional.Despite criticism from some US observers who called the swap a “bailout,” Bausili clarified that treasury secretary Bessent had confirmed the agreement was independent of any arrangements involving China.Milei, once seen as a symbol of libertarian fiscal discipline, now faces a crucial electoral test amid economic uncertainty and voter discontent. The upcoming vote is expected to determine the future of his market-driven reform agenda and Argentina’s broader financial stability.
