Scott Besent: United States announces that “whatever is necessary to support Argentina”

The unconditional alignment that Javier Milei has won Donald Trump shows his first fruits. When the Argentine president is going through his moment of greater political weakness and his economic plan, the United States Republican government announced that “he is willing to do whatever is necessary within his mandate to support Argentina.” That support, said Treasury Secretary, Scott Besent, could be realized with a Swap of coins, purchase of Argentine currencies or debt called in dollars. A Trump rescue would strengthen Milei’s hopes of stabilizing the currency of the South American country, reassuring the financial market and improving its perspectives for the legislative elections of October 26.

The announcement occurred on Monday, minutes before the opening of the markets in Argentina and on the eve of Milei’s departure to New York, where it is planned to meet Trump and Besent on Tuesday, before participating in the United Nations General Assembly. “Huge thanks to Secretary Scott Besent and President Donald Trump for unconditional support for the Argentine people,” Milei celebrated with a message on their social networks.

Argentina is going through a whirlwind of financial volatility and the Milei government fails to stop the drop in the dollar. In the last three days of last week, the Central Bank of the country had to sell a total of 1,110 million dollars of its league reserves, to support the flotation scheme between bands in force in the change market. In that critical context, Milei revealed on Friday that negotiated a Treasury loan in the United States to be able to meet debt maturities for 8,500 million dollars during the next year.

“Argentina is an ally of systemic importance for the United States in Latin America and the Department of the Treasury is willing to do what is necessary within its mandate to support Argentina,” Besent confirmed on Monday, with a message on Network X.

The Treasury Secretary added that “all options for stabilization” of the Argentine economy are being considered and said three of the alternatives under analysis: an agreement for the exchange of currencies between the central banks (Swap), The direct purchase of Argentine pesos with US dollars or the acquisition of Argentine debt called in dollars through the treasure stabilization fund.

The public confirmation of the rescue relieved a start of the week that was supposed to be complex for Argentine markets. The sovereign actions and bonds of the country exhibited strong uploads on Monday, after days of marking collapse. The price of the official dollar fell 3% in the opening. The country risk, which is the differential that the Argentine debt pays with respect to that of the United States, accompanied the news with a decrease of 17% with respect to Friday, until it is located in the 1,200 points band.

To the negotiation with the United States is added another measure taken by Milei, in search of foreign exchange. The ultra -rightist government on Monday ordered to suspend the collection of export rights to agricultural products, the great source of income for the coffers of the country. The measure will govern until October 31 – that is, up to five days after the elections – or until the liquidation reaches a value of 7,000 million dollars.

“The old policy seeks to generate uncertainty to boycott the government program,” said the spokesman of the Casa Rosada, Manuel Adorni, to justify the decision. “With the aim of generating a greater offer of dollars during this period, until October 31 there will be zero withholdings for all grains,” said Adorni. The elimination of export withholdings is a repeated claim of the field, which requires them to be definitive and not temporary.

Milei’s economic plan has been based, since its assumption in December 2023, in a cheap dollar in pesos to contain inflation, a severe tax adjustment and on the deregulation of the economy. At least since the beginning of this year’s second quarter, Argentina drags an unstable financial situation.

Thanks to Trump’s political support, last April the Government agreed to a rescue of 20,000 million dollars with the International Monetary Fund – at the country still owes another 40,000 million – and achieved some calm, but lasted just three months. The wide defeat suffered by the ultra -right before Peronism in the legislative elections of the province of Buenos Aires, earlier this month, exposed the political weakness of a government with little parliamentary support and precipitated a new scenario of uncertainty.