Argentina’s $20B rescue: U.S. puts its weight behind Milei
The United States is preparing a $20 billion financial lifeline for Argentina, a move aimed at shoring up President Javier Milei as he faces growing market pressure and a pivotal midterm election.
Treasury Secretary Scott Bessent, on Wednesday, September 24, 2025, said that Washington is negotiating a swap line and is ready to purchase Argentine sovereign bonds, signalling direct support for Milei’s reform program. Bessent described the package as a “bridge to the election,” underscoring the Trump administration’s desire to back an ideological ally in South America.
Argentina has endured decades of economic instability, defaulting on sovereign debt three times since 2001 and repeatedly falling short on IMF agreements. Milei, a self-styled libertarian reformer, has sought to stabilise the peso, cut spending, and rebuild confidence after his party’s recent election setback triggered capital flight. The peso has lost over 90% of its value in the past five years, while inflation, although sharply down to 34% this year from 289% in 2024, remains among the world’s highest according to the IMF and the Argentine Central Bank.
The U.S. plan, which includes access to the Treasury’s Exchange Stabilisation Fund, would supplement Argentina’s $20 billion IMF program secured earlier this year.
The move marks a striking reversal for President Donald Trump, who has cut foreign aid elsewhere while confronting Brazil, Mexico, and Venezuela. In Argentina, however, Trump is doubling down on Milei, whose pro-market agenda and public praise of Washington have made him a rare regional ally.
The plan has drawn criticism at home, with Senator Elizabeth Warren warning that it amounts to a bailout of “a political ally and his global investors before an election.” Economists, including Brad Setser of the Council on Foreign Relations, caution that the U.S. risks repeating the IMF’s experience of lending heavily to Argentina with little chance of repayment.
Washington’s $20 billion swap line would eclipse Argentina’s existing $18 billion agreement with China’s central bank, signalling a strategic push to counter Beijing’s growing financial footprint in Latin America.
For Milei, the U.S. backing offers both short-term stability and political cover.
This story is written and edited by the Global South World team, you can contact us here.
