Argentina’s central bank and the U.S. Treasury have signed a currency swap line for $20 billion, a key vote of confidence for President Javier Milei ahead of a crucial midterm election on Sunday.
The deal, announced by the Argentine monetary authority on Monday, is meant to preserve price stability and promote sustainable economic growth in the crisis-prone nation. The agreement establishes terms and conditions for the bilateral swap arrangement and will strengthen the liquidity of Argentina’s international reserves.
Argentina’s dollar bonds jumped after the statement was released, with notes maturing in 2035 reaching a high for the day to trade 0.6 cent higher, at around 56 cents on the dollar, according to indicative pricing data compiled by Bloomberg.
Last week, Milei met with President Donald Trump at the White House, and his economic team, led by Luis Caputo, stayed in Washington to meet with investors and the International Monetary Fund. During the meeting, Trump said aid to the South American nation was contingent on a good election result, worrying investors that the help may only come after the vote.
The agreement aims to bolster Argentina’s currency, which has continued to sell off despite Treasury Secretary Scott Bessent announcing the U.S. was buying pesos and repeatedly signaling for a month that an agreement is coming. Currency traders in Argentina estimated that the U.S. Treasury sold over $200 million on Friday, building on other interventions from previous days. The peso is down 5.7% so far in October and nearly 30% so far this year, the worst in emerging markets over both periods.
The deal came a day after Trump said the United States could buy Argentine beef in an attempt to bring down prices for American consumers.
US signs currency swap line for $20B
