US Treasury Secretary Scott Bessent is defending a rare intervention to support Argentina’s peso, a high-stakes move that aligns Washington with political ally President Javier Milei. The effort helped stabilize the Argentine currency ahead of its midterm elections, but American taxpayers now face potential losses.
In mid-September, the United States established a $20 billion currency swap line and made direct purchases of pesos to counter a sharp pre-election weakening. The action was widely seen as crucial to strengthening the political position of Milei, a close Trump ally implementing sweeping austerity. His party subsequently secured strong electoral gains, which Bessent cites as evidence the strategy is working.
Despite the support, significant financial risks remain. The peso has still fallen about 30 percent this year. Analysts warn the US could be holding pesos worth significantly less than their purchase price, a concern given Argentina’s long history of currency devaluation and default. Direct currency intervention is highly unusual for the US, typically reserved for broader global financial threats.
The partnership is driven by strong political alignment. Milei is popular among US conservatives for his rapid free market reforms and has met repeatedly with former President Trump. Bessent, a former currency trader, argues supporting Argentina is necessary to prevent regional instability. He claims the intervention has already produced a profit for the US, though the Treasury has not released data to confirm this.
The lack of transparency is drawing criticism from both US political parties. Democrats question providing financial support abroad during domestic spending fights, while some Republicans wonder how it fits with an America First agenda. The Treasury has not disclosed key details such as the volume of peso purchases or what collateral Argentina provided.
For now, business confidence in Argentina has improved since the elections. However, most economists anticipate further peso depreciation, which will test the limits of US support and Bessent’s assurances that American taxpayers will not face losses.
