U.S. will not lose money on Argentina bailout, Bessent promises
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Treasury Secretary Scott Bessent speaks to reporters outside the White House. Photo: Aaron Schwartz/CNP/Bloomberg via Getty Images
The U.S. will not lose money on its massive bailout of Argentina, Treasury Secretary Scott Bessent said Sunday, despite the continued weakening of the Argentine currency.
Why it matters: American intervention in Argentina's economy so far hasn't paid off, with the peso falling to record lows despite unprecedented levels of support.
The big picture: The U.S. has gone all-in on President Javier Milei, who faces crucial midterm elections Sunday that are effectively a referendum on his inflation-slashing economic policies.
- But Milei's grip on power has weakened in recent months, throwing his economy's stability into question.
Driving the news: In order to rescue Milei, the U.S. pledged a $20 billion currency swap with the Argentine central bank, the largest American bailout of another country since Mexico in 1995.
- Bessent also pledged to organize another $20 billion in aid from the private sector, putting the full might of the U.S. government behind saving Argentina in a manner with little recent precedent.
- On top of those deals, the U.S. has also been buying Argentine pesos in the open market in recent weeks, though those steps haven't helped — the peso's fallen another 10% in the last month despite the Treasury's efforts.
What they're saying: Bessent, in a series of interviews on Sunday morning TV news shows, defended the package as being in America's interests.
- "It is America first because we are supporting a U.S. ally. There will be no taxpayer losses," Bessent told NBC's "Meet the Press."
- He similarly told CBS's "Face the Nation" that the Exchange Stabilization Fund, the source of the $20 billion swap, "has never lost money. It will not lose money this time."
The intrigue: The Argentina rescue has become increasingly unpopular at home, despite the government's assurances.
- In the latest Economist/YouGov poll, only 20% of respondents said they strongly or somewhat approved of the package, against 56% who disapproved.
- Farm interests oppose the deal because Argentina has been selling huge quantities of soybeans to China, while U.S. farmers are shut out. Ranchers oppose Trump's recent move to quadruple Argentine beef imports in an effort to lower retail prices.
Yes, but: Bessent framed the intervention in Argentina in existential terms, describing it as an effort to support an ally and counter forces in other countries less aligned with Trump policy.
- "We want to set the tone in Latin America," Bessent told NBC.
- "I would rather extend a swap line than be shooting at the boats carrying drugs, as we're having to, coming out of Venezuela."
What to watch: What happens after Sunday's elections.
- Trump has suggested the level of U.S. support will be conditioned on how well Milei does, though Bessent has clarified that the U.S. position is tied to policy, and not one leader in particular.
