U.S. ready to support Argentina with 'large and forceful' action

U.S. Treasury Secretary Scott Bessent stated on Monday that "all options" are available to stabilize Argentina, including swap lines and direct currency purchases, while emphasizing President Donald Trump's confidence in Argentine President Javier Milei and his economic team.

Bessent told reporters that any U.S. actions would be 'large and forceful', but noted that no steps would be taken until after he and Trump meet with Milei in New York on Tuesday, during the United Nations General Assembly.

When asked if Washington could act immediately after the meeting, Bessent responded, "We'll see where the markets are and what the level of outflows are—or perhaps the outflows could turn into inflows, but no one should doubt the resolve of this administration, or my resolve."

Although Bessent refrained from specifying what actions the U.S. might take to support Argentina and calm the markets, he reiterated that "it will be large and forceful."

The former hedge fund executive expressed that he did not foresee a risk of financial contagion from Argentina’s crisis, emphasising that Washington viewed Argentina’s economic reforms as progressing "quite well." He also mentioned that the Trump administration hoped to strengthen what it sees as a rightward shift in Latin American countries, including potentially Colombia.

No new terms or conditions for U.S. support

Bessent first announced U.S. support for Argentina in a social media post, stating that all options were on the table, including but not limited to swap lines, direct currency purchases, and purchases of U.S. dollar-denominated government debt from the Treasury’s Exchange Stabilisation Fund.

He assured reporters that any U.S. actions would not impose new demands or conditions, aside from Argentina’s continued adherence to the terms of its loan agreement with the International Monetary Fund (IMF).

"I can't speak for the president, but as far as Treasury is concerned, there’s no conditionality," Bessent clarified.

Argentina entered into a new $20 billion, four-year loan agreement with the IMF in April, which required the country to dismantle long-standing currency controls and relax its grip on the peso. Milei is seeking support for his economic policies as financial markets have been unsettled by his ruling party’s loss in the legislative elections in Buenos Aires province, indicating growing dissatisfaction with austerity measures.

Argentina's central bank conducted its largest daily dollar sale in nearly six years on Friday, using reserves to support the local currency in response to high demand for dollars from institutional investors concerned about political instability. The bank’s intervention totalled $678 million, bringing the total amount of dollars sold over the past three sessions to $1.1 billion.

"We remain confident that President @JMilei’s support for fiscal discipline and pro-growth reforms are necessary to break Argentina’s long history of decline," Bessent wrote on X.

Treasury satisfied with IMF's position on Argentina

Bessent also told reporters that the IMF could not make adjustments to its programme for Argentina until after the country’s election. He spoke with IMF Managing Director Kristalina Georgieva over the weekend and said he was "very satisfied" with the IMF’s position.

It was not immediately clear if Georgieva, who is also attending the U.N. meetings, would meet with Milei in New York. A spokesperson for the IMF could not immediately provide comment on Argentina’s situation.

When asked if he had consulted with Wall Street players or banks regarding the need for intervention on Argentina’s behalf, Bessent stated, "None of this is based on U.S. market positions. They are free to take gains or losses. Our markets team interacts with investors daily on a variety of topics."

When asked whether Elon Musk had played any role in this, given reports that Musk spoke to Trump on Sunday, Bessent replied, "Not that I know of."

Bessent, when asked about the cause of the crisis, attributed it to nervous investors with "muscle memory" from Argentina’s previous administration.

"Either there’s some risk management or a rush for the exit, with the idea that the opposition could do well in the upcoming election," he said, adding that it was unclear if a market "feedback mechanism" would ultimately strengthen Milei’s support or undermine Argentina’s real economy.

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