Jens Asbjørn Bøgen
The Argentinian President has so far spent 5 % of the country’s total reserves to try and save the economy.
The Argentinian President has so far spent 5 % of the country’s total reserves to try and save the economy.
What is happening?
The United States is preparing to step in with emergency support for Argentina as the South American country teeters on the brink of economic collapse.
US President Donald Trump is expected to offer assistance to his close ally, Argentine President Javier Milei, in an effort to stabilize markets and prevent a full-scale debt crisis, Reuters reports.
Market turmoil pushes Argentina to the edge
Argentina has been battered by severe market volatility, with its financial reserves rapidly dwindling.
President Milei has already spent $1.1 billion—more than 5% of the country’s total reserves—in a desperate bid to shore up the peso and avoid default.
Trump administration promises to “Make Argentina Great Again”
U.S. Treasury Secretary Scott Bessent confirmed that “all options are on the table” ahead of a high-stakes meeting in New York
Bessent and Trump are set to meet with Milei to discuss potential lifelines, including currency swaps and bond purchases.
Strategic support to preserve Milei’s reform agenda
With Argentina facing mounting pressure, U.S. intervention could be key to keeping Milei’s pro-market reforms alive.
“We remain confident that President Milei’s support for fiscal discipline and pro-growth reforms are necessary to break Argentina’s long history of decline,” Bessent stated.
Dollars, bonds, or swaps
The U.S. may use Treasury funds to buy Argentine bonds or support the peso directly.
Another option includes a Federal Reserve-backed currency-swap agreement.
Such measures could help restore investor confidence and stabilize Argentina’s fragile economy.
Milei’s China ties raise eyebrows in Washington
While Argentina renewed a $5 billion currency swap deal with China earlier this year, Washington is wary.
The move stirred geopolitical concerns, especially given Milei’s vocal support for Trump.
Now, with Milei politically weakened, the U.S. sees an opportunity to assert greater influence.
Political setbacks shake Milei’s standing
Milei’s recent election loss in Buenos Aires Province dealt a serious blow to his authority.
His coalition won just 34% of the vote, while Peronist forces surged to 47%, triggering a steep market downturn.
A corruption scandal involving his sister has added to the pressure.
Mounting protests and a shift in economic tone
Tens of thousands recently marched in Buenos Aires demanding higher health and education spending.
Facing growing unrest, Milei has hinted at easing austerity measures and increasing welfare spending—a pivot from his earlier hardline stance.
Argentina faces $9.5 Billion in debt repayments
With $9.5 billion due next year, Milei is racing to maintain the peso’s strength.
Economy Minister Luis Caputo declared the government would “sell to the very last dollar” to support the currency, which has already fallen nearly 10% since the election setback.
IMF, U.S. join forces to steady Argentina
In April, the IMF approved a $20 billion loan package for Argentina, including a record $12 billion upfront payment.
However, the country has since missed key targets. IMF chief Kristalina Georgieva praised the U.S. for stepping in, calling it vital for Argentina’s path to stability and growth.
This article is made and published by Jens Asbjørn Bogen, which may have used AI in the preparation
