 "This handout picture released by the Argentinian Presidency shows Argentina's President Javier Milei (L) and US President Donald Trump gesturing as they pose for a picture in the framework of the annual Conservative Political Action Conference (CPAC) at the Gaylord National Resort & Convention Center at National Harbor in Oxon Hill, Maryland, United States on February 22, 2025. Javier Milei met this Saturday with Donald Trump at the end of a conservative convention near Washington, where the Argentine president promised to join the reciprocal tariff policy of his US counterpart, who invited him to the White House. (Photo by Handout / Argentinian Presidency / AFP) / RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT \"AFP PHOTO / ARGENTINIAN PRESIDENCY / HANDOUT / \" - NO MARKETING NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTS")
US Treasury Secretary Scott Bessent on Monday said “all options” were being considered to stabilise Argentina, including swap lines and direct currency purchases, while underlining President Donald Trump’s confidence in President Javier Milei and his economic team.
Will the ‘Large and forceful’ measures work?
Bessent told reporters any US support would be “large and forceful”, but added no action would be taken until after Trump and he meet Milei in New York on Tuesday on the sidelines of the UN General Assembly.
Asked if Washington could act immediately afterwards, Bessent said, “We’ll see where the markets are and what the level of outflows are – or maybe the outflows turn into inflows – but no one should doubt the resolve of this administration, or my resolve.”
He declined to give specifics but repeated, “I can tell you that it will be large and forceful.”
How does the Argentine market reaction
The comments sparked a rally in Argentine assets on Monday, with US-traded stocks surging more than 10 per cent and the peso strengthening after weeks of steep losses. Investors had been unnerved by corruption allegations around Milei’s allies and a heavy local election defeat in Buenos Aires, which fuelled doubts about his austerity programme ahead of October’s midterms.
Confidence in Milei’s reforms
Bessent, a former hedge fund executive, dismissed concerns of broader financial contagion and stressed Washington’s confidence in Argentina’s reforms. Since taking office in late 2023, Milei has managed to rein in inflation and deliver a budget surplus.
“What they’re trying to do is bolster Argentina until the elections – if they can get that far,” said Mark Sobel, a former senior Treasury official. “Milei deserves tremendous credit for what they’ve done on the fiscal and monetary policy front … but the exchange rate is just vastly overvalued and they’ve got to fix that.”
No new conditions for support
Bessent also made clear that US support would not involve new conditions beyond Argentina’s compliance with its IMF loan programme. In a post on social media, he wrote that options “may include, but are not limited to, swap lines, direct currency purchases, and purchases of US dollar-denominated government debt from Treasury’s Exchange Stabilisation Fund.”