Overview
- Oxford Economics says the U.S. package centers on a Treasury swap line of about $20 billion with a potential matching tranche from private banks and funds after the vote, characterizing it as timely but temporary with uncertain immediate access.
- The firm outlines five failure channels: social fatigue after harsh fiscal measures, lack of a governing majority, persistent outflows and fragile confidence, unclear and contingent support, and rising solvency risks that could weigh on bond valuations.
- Market stress intensified following the intervention’s announcement, with repo rates reported jumping from 80% to 160% as the central bank sold roughly $45 million while the dollar touched the top of the trading band.
- President Donald Trump publicly tied continued U.S. support to a Milei victory, a stance that analysts and Paul Krugman say emboldened opposition and accelerated capital flight.
- Critics including Krugman and the Financial Times’ Martin Wolf question the program’s rationale and beneficiaries, noting reported probable terms such as priority repayment before 2027, preferential access to lithium and copper, and a phased replacement of Argentina’s swap line with China.