The US Treasury has started buying Argentine pesos on the open market as part of a currency swap deal designed to boost the South American currency.
The US finalised the $20billion currency swap deal with Argentina after President Donald Trump promised to prop up the country’s shaky economy.
The deal saw the peso and Argentine dollar bonds surge sharply, with pesos rallying 1,418 per dollar, an increase of 0.8 per cent at close, after falling 3 per cent earlier.
The 2035 dollar bond rose 4.5 cents to 60.5 cents to the dollar, while Argentine stocks jumped 5.3 per cent, up from a 2025 low last month, while Argentine stocks traded in the US rocketed 13 per cent.
Scott Bessent, US Treasury Secretary, posted on X: ‘The U.S. Treasury is prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets.’
The move came after Bessent met with Argentine Finance Minister Luis Caputo over four days.
Argentina’s economy has been suffering over recent months, with the value of the peso falling considerably, and big sell-ffs of Argentine bonds
Argentina’s President, Javier Milei, wrote on X: ‘Together, as the closest of allies, we will make a hemisphere of economic freedom and prosperity.’
Argentina’s economy has been suffering over recent months, with the value of the peso falling considerably, and big sell-ffs of Argentine bonds.
The country faces midterm elections later this month, which will see half of the Chamber of Deputies and a third of the senate be elected.
Kristalina Georgiva, managing director of the International Monetary Fund, which has a £20billion loan agreement with Argentina, said the IMF was ‘fully aligned in support of the country’s strong economic program, anchored on fiscal discipline and a robust FX regime to facilitate reserve accumulation’.
Speaking on the ‘The Ingraham Angle show’ on Fox News, Bessent said the move wasn’t a bailout for the Argentine economy and that no money had been transferred to Buenos Aires.
Bessent said the peso is undervalued, and added that Milei is ‘committed to getting China out of Argentina’.
The Treasury Secretary previously promised support for Argentina from the US Treasury’s $221 billion Exchange Stabilization Fund and from IMF Special Drawing Rights in which the US has a majority holding.
Democratic Senator Elizabeth Warren said: ‘It is inexplicable that President Trump is propping up a foreign government, while he shuts down our own.’
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .