U.S. buys pesos and activates $20B swap with Argentina

U.S. Treasury Secretary Scott Bessent said on Sunday that the United States will not lose a single cent of taxpayer money from its $20 billion financial deal with Argentina.

Speaking on NBC’s “Meet the Press,” Scott dismissed claims that the move was a bailout, emphasizing that the funding came directly from the Exchange Stabilization Fund, a Treasury pool under his control, not taxpayer cash.

“There will be no taxpayer losses. This is a swap line. This is not a bailout, and it is from the Exchange Stabilization Fund, which I control at Treasury,” Scott said. “It has never registered a loss. It is not going to register a loss.”

The United States sealed the agreement earlier this month, just days ahead of Argentina’s high-stakes midterm elections.

Officials from both countries held closed meetings in Washington, after which the U.S. bought Argentine pesos on the open market and finalized the $20 billion swap deal with Argentina’s central bank. The timing was not coincidental.

Argentina’s libertarian President Javier Milei, who is backed by the Trump administration, is facing pressure to protect his fiscal austerity and market reform agenda from opposition rollbacks in Congress.

U.S. buys pesos and activates $20B swap with Argentina

The Treasury has been actively purchasing pesos on global markets, even though traders and economists say the currency is significantly overvalued. The intervention has raised eyebrows.

Despite repeated questions, the Treasury has shared very little about the mechanics of the swap line or the peso buying operations. But Scott doesn’t care what Wall Street thinks. “We are supporting a U.S. ally in Latin America,” he told NBC, making it clear that this move was about foreign policy as much as it was about economics.

The swap line itself is not funded by Congress. Instead, it comes from the Exchange Stabilization Fund, which holds about $211 billion and was last used during the COVID-19 crisis and the 2023 U.S. bank panic.

The fund’s biggest asset is the Special Drawing Rights from the International Monetary Fund, not taxpayer dollars. That’s why Scott keeps repeating that the U.S. won’t eat any losses here, no matter how the peso performs.

Argentina’s elections are happening under heavy economic pressure. Milei’s camp is betting on voter support to secure more congressional seats and avoid any reversal of his shock therapy reforms. These include drastic spending cuts, deregulation, and slashing the size of the state, all policies that fit cleanly into the Trump economic playbook.

Scott says the U.S. wants to send a clear message to Latin America

Scott then said that the Trump administration is using this Argentina deal to send a warning shot to other regimes in Latin America. “We want to set the tone in Latin America,” he said. “We don’t want Argentina to become Venezuela, a failed narco-state.”

That wasn’t subtle. He called Venezuela by name and made it clear that the U.S. intends to use its financial power upfront to stabilize governments it considers friendly.

Scott also listed countries watching closely. “Bolivia, Ecuador, Paraguay; they all want to follow,” he said, claiming that other governments in the region are eyeing Milei’s reforms and U.S. support as a potential model.

“So we think it is much better to use American economic power up front to stabilize a friendly government and lead the way,” Scott added.

This isn’t the first time the U.S. has quietly used the Exchange Stabilization Fund for international leverage, but it is the first time since 2020 that it’s been deployed this openly.

With the dollar still strong and the peso under attack, the U.S. is throwing its weight into Argentina’s currency war, with zero intention of letting it look like a handout. Just don’t call it a bailout. Scott won’t tolerate that.

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