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6h ago

U.S. Unveils $20 Billion Backstop for Argentina as Milei Seeks White House Assurances

Uncertainty over how long U.S. support will last is now the pivotal question for markets.

U.S. President Donald Trump (R) shakes hands with President of Argentina Javier Milei during a bilateral meeting at the 80th session of the UN’s General Assembly at the United Nations headquarters on September 23, 2025 in New York City.
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Argentine President Javier Milei reacts during the presentation of his book "Construction of the Miracle", at the Movistar Arena, in Buenos Aires, Argentina, October 6, 2025. REUTERS/Agustin Marcarian

Overview

  • Treasury finalized a $20 billion currency-swap framework and executed undisclosed peso purchases to steady Argentina’s markets in an unusual direct intervention.
  • President Javier Milei meets President Donald Trump at the White House on Tuesday, with investors expecting clearer guidance on the scope and terms of continued U.S. support.
  • Argentine assets rallied after the announcement but later gave back part of the gains, underscoring fragile sentiment and doubts about a durable peso stabilization.
  • The rescue is closely tied to the Oct. 26 midterms, with investors warning U.S. backing could wane if Milei’s party underperforms and his reform agenda stalls.
  • The move drew criticism over the Treasury’s use of the Exchange Stabilization Fund without Congressional approval and intensified debate over longer-term fixes such as dollarization, which Economy Minister Luis Caputo said is not planned now.