US Treasury Secretary Scott Bessent stated that the United States is prepared to assist in stabilizing Argentina’s financial situation, which has been experiencing significant turmoil. Bessent indicated that “all options for stabilization are on the table,” highlighting Argentina’s importance as a US ally in Latin America. His comments have contributed to some calming of financial markets, which had been unsettled by recent electoral losses that raised concerns over President Javier Milei’s commitment to his free-market agenda.
The Argentine peso has seen a steep decline in value as investors are pulling out of Argentine stocks and bonds, raising questions about the government’s ability to maintain the currency’s stability. President Milei, elected in 2023 as a libertarian economist, promised to combat soaring inflation through substantial government spending cuts and reforms. A stable currency is key to his economic strategy.
Recently, the Argentine central bank attempted to stabilize the peso by spending $1.1 billion of its reserves to buy pesos, a move that risked depleting its resources for repaying debt. Bessent mentioned that the US government is contemplating various forms of support, including the potential purchase of Argentine pesos and dollar-denominated government debt. Further details are anticipated following a meeting between President Milei and President Donald Trump in New York.
Milei expressed gratitude for US support, which positively influenced Argentina’s financial markets. However, he is facing challenges domestically, including recent electoral setbacks and a bribery scandal involving his sister. National mid-term elections in October are expected to serve as a referendum on Milei’s controversial policies, which include cuts to social programs. In April, Bessent also supported Argentina in securing a $20 billion loan from the International Monetary Fund.
Source: https://www.bbc.com/news/articles/czdjrnvp972o?at_medium=RSS&at_campaign=rss