Argentina’s right-wing President Milay, a close ally of President Trump, faces important midterm elections this month.
Published October 9, 2025
U.S. President Donald Trump’s administration has bought the Argentine peso and finalized a $20 billion currency swap framework with Argentina’s central bank, a deal aimed at rehabilitating Argentina’s flagging finances.
Treasury Secretary Scott Bessent announced the agreement on Thursday X, saying, “Argentina faces a moment of severe liquidity loss. The international community (including the International Monetary Fund) is united behind Argentina and its prudent fiscal strategy, but only the United States can act quickly. And so will we.”
Recommended stories
list of 3 itemsend of list
Bessent’s comments came after four days of talks with Argentina’s Luis Caputo, who expressed his “deep gratitude” to Bessent for X after the deal was announced.
The aid comes as Argentina’s right-wing President Javier Milei, a close ally of Trump, struggles with financial market turmoil.
Argentina’s government bond prices plunged in late September as investors watched the country’s central bank rapidly deplete its scarce foreign exchange reserves to protect against a falling peso.
In early October, the currency fell by more than 6%, the biggest single-day drop since September 8, forcing the government to sell more dollars in the spot market to prop up the currency.
The Trump administration insists the program is not a bailout, but U.S. farmers and Democratic lawmakers have criticized the deal, saying it helps countries that have profited from soybean sales to China and disadvantages U.S. farmers.
After Thursday’s announcement, a group of Democratic senators introduced the No Bailout for Argentina Act, which would stop the Treasury Department from using the Exchange Stabilization Fund to support Argentina.
“It is incomprehensible that President Trump would shut down our government while supporting a foreign government,” Democratic Sen. Elizabeth Warren said in a statement. “Trump promised to put ‘America first,’ but now he is putting himself and his fellow billionaires first and trying to force the bill on the American people.”
Once a maverick outsider, Milais secured a surprise victory in the 2023 election, pledging to rein in runaway inflation and promote stability. Trump, a liberal ally, previously described Milley as his “favorite president.”
Andres Abadia, chief Latin American economist at Pantheon Macroeconomics, told Al Jazeera in early October that U.S. financial support “has bought time for Milay. It’s a lifeline, but it’s not a panacea.” He added that in the short term, “inflation risks are on the upside…if Mr Millais does poorly in October, the negative political and fiscal noise will come back all at once.”
“That would be a tough scenario for Millay,” Abadia said.
Argentina’s midterm elections are scheduled for October 26th.
