US buys more Argentine pesos, working on $20 billion debt facility, Bessent says By Reuters

By David Lawder WASHINGTON (Reuters) -The U.S. again purchased Argentine pesos in the open market on Wednesday, Treasury Secretary Scott Bessent told reporters, adding that the department was working with banks and investment funds to create a $20 billion facility to invest in the South American country’s sovereign debt. Bessent said during a press conference that the facility would sit alongside a new $20 billion U.S. currency swap line for Argentina, providing a total of $40 billion in support for Latin America’s third-largest economy. Bessent did not provide details of the peso operation, which follows an initial U.S. purchase on October 9. The action contributed to recovery in Argentine stocks after U.S. President Donald Trump’s comment on Tuesday that appeared to call U.S. support for Argentina into question. Local stocks ended up 1.7% after rising more than 4% earlier, while international dollar bonds ticked up after selling off on Tuesday. But the peso weakened after Bessent’s announcement, declining 1.7% to 1,378 per dollar. Trump said on Tuesday that the U.S. would not "waste our time" with Argentina if President Javier Milei’s party loses in parliamentary elections on October 26. But Bessent clarified that the U.S. would continue to support Argentina financially as long as Milei’s government pursues "good policies," regardless of the election outcome. Bessent said the Trump administration’s support for Argentina "is not election-specific," but a win for Milei’s La Libertad Avanza party would ensure that the right-wing Argentine president has a sufficient majority to veto policies aimed at ending his libertarian fiscal austerity agenda and free-market overhaul of the country’s crisis-prone economy. 3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads . "It is policy-specific. So as long as Argentina continues enacting good policy, they will have U.S. support," Bessent said. Asked if the peso operation would be accompanied by U.S. purchases of Argentine debt, Bessent said, "We could," without elaborating. Work on the private-sector debt investment facility has been underway for weeks, but Bessent did not provide a timeline for any debt purchases. "So it is a private-sector solution to Argentina’s upcoming debt payments," Bessent said. "Many banks are interested in it, and many sovereign funds have expressed interest in being part of it." ARGENTINA PROMISES POLICY CONTINUITY In Buenos Aires, Argentina’s Economy Minister Luis Caputo said on Wednesday that he hopes "very soon" to execute the terms of the $20 billion U.S. currency swap, ideally before the October 26 vote. Despite Trump’s support for ideological ally Milei, a key local election in Buenos Aires recently handed a resounding victory to his socially focused opposition. Caputo said that regardless of the outcome of the vote, the policies of the Milei administration would remain the same. He added that the Argentine administration was working on additional financial options it could not yet disclose, and that some U.S. businesses had informally pledged billions of dollars in investment during recent meetings. The Trump administration has disclosed few details about the swap line arrangement, aimed at improving Argentina’s market liquidity. Bessent confirmed it would be backed by International Monetary Fund Special Drawing Rights assets that are held in the Treasury’s Exchange Stabilization Fund and would be converted to dollars. 3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads . Asked whether the U.S. would assume a preferred creditor status ahead of the IMF or private-sector lenders, Bessent said: "No, that’s what China does, we don’t do that." Milei said the government is in talks with the U.S. over a potential agreement that would grant the South American country trade advantages. "There is an issue of trade advantages that the United States would be giving us; the U.S. has strongly favored Argentina," Milei said in a television interview. ECONOMIC ’MONROE DOCTRINE’ Bessent said the Trump administration was motivated not by any systemic risk emanating from Argentina, but views the country as the centerpiece of an "Economic Monroe Doctrine," a reference to the 1823 U.S. foreign policy doctrine aimed at ensuring U.S. influence over the Americas. China has gained influence in Latin America in recent years, and maintains its own $18 billion swap line with Argentina. Bessent said Milei’s government is a "beacon" for resisting past socialist policies and its success could help shift other governments in the region to the right.