The Argentine peso depreciated against the dollar Friday despite fresh US support for the currency that has proven volatile ahead of legislative elections later this month.
With the government of President Javier Milei under pressure, the peso dropped to 1,465 to the dollar Friday morning, having closed at 1,430 the day before.
US Treasury Secretary Scott Bessent on Wednesday announced a new $20 billion “facility” to support the South American country’s embattled economy, bringing total promised US assistance to a whopping $40 billion and causing Argentine stocks to surge.
Bessent said the new bailout would come from “private banks and sovereign wealth funds” and would be “more aimed at the debt market” amid growing concerns over Argentina’s ability to meet its looming debt repayments.
The aid was in addition to a $20 billion “swap line” announced in September to boost Milei, an ally of US President Donald Trump, ahead of mid-term elections on October 26.
Milei, once a global poster boy for budget-slashing libertarian politics, is heading into the polls diminished by his failure to stabilize Argentina’s ailing peso despite spending nearly all the Central Bank’s dollar reserves to prop it up.
Bessent said on X that the US Treasury bought pesos Thursday “in the ‘Blue Chip Swap’ and spot markets,” without stating the value of the transactions.
“Treasury is monitoring all markets, and we have the capacity to act with flexibility and with force to stabilize Argentina,” he said.
Argentina’s Economy Minister Luis Caputo, in Washington for negotiations with the United States, on Thursday ruled out devaluation of the peso.
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