Argentina repays U.S. swap line; Treasury hails success
Argentina repaid its draw on a $20 billion U.S. swap line, Treasury Secretary Scott Bessent said, boosting President Javier Milei's economic credibility despite ongoing fiscal risks.
Overview
U.S. Treasury Secretary Scott Bessent announced Argentina repaid funds drawn from a $20 billion swap line, returning pesos and eliminating U.S. Exchange Stabilization Fund exposure.
The repayment follows Argentina's October midterm-related market crisis and December settlement by the central bank, with officials confirming a $2.5 billion pesos-for-dollars swap through end of October.
The U.S. intervention provided dollar liquidity, halted a market rout, and helped Milei's libertarian party secure electoral gains that eased investor concerns and revived bond issuance.
Bessent framed the move as an 'America First' success, but critics raised objections about risking taxpayer funds, opacity of the deal, and long-term Argentine vulnerabilities.
Despite repayment and a recent dollar bond, Argentina still faces low foreign reserves and upcoming IMF and private debt repayments that could strain its recovery.
Analysis
Center-leaning sources frame Milei’s repayment as a pragmatic victory restoring market confidence, using positive editorial language ('crucial step', 'revived optimism') and foregrounding official praise (Bessent’s and Caputo’s quotes). Critical viewpoints are summarized briefly ('opaque and apparently unconditional'), creating an overall narrative that emphasizes success while treating risks as secondary.
Sources (3)
FAQ
A currency swap line is an agreement where two parties exchange currencies temporarily and agree to reverse the transaction later with interest. In this case, Argentina’s central bank exchanged pesos for up to $20 billion in U.S. dollars from the U.S. Treasury’s Exchange Stabilization Fund, gaining dollar liquidity during a market crisis and later repaying the dollars to unwind the swap.[1]
The U.S. Treasury extended the $20 billion swap line in October 2025 to support Argentina’s collapsing peso, provide emergency dollar liquidity, and stabilize markets ahead of crucial midterm elections, in part to back President Javier Milei’s market-oriented reforms and a key regional ally.[1][3]
Repaying the drawn $2.5 billion from the swap line and making bondholder payments signals that Milei’s government can meet short-term obligations, which helps restore investor confidence and supports his image as fiscally disciplined, even though Argentina’s broader vulnerabilities remain.[1]
Critics in the U.S. argued that the swap line put taxpayer funds at risk, relied on the politically sensitive Exchange Stabilization Fund, was unusually opaque and seemingly unconditional, and might have been used to give Milei a political boost before elections rather than being a purely economic decision.[1]
Argentina still has low foreign exchange reserves and must meet sizeable upcoming obligations to the International Monetary Fund and private creditors, which could strain its external finances and test its ability to maintain stability without further emergency support.[1][2][3]
History
This story does not have any previous versions.