Argentina Secures $20 Billion Currency Deal with U.S. Pre-Elections

Argentina's central bank signed a $20 billion exchange rate stabilization agreement with the U.S. Treasury, just days before crucial midterm elections. The deal aims to strengthen Argentina's financial resilience amid volatile market conditions, with implications for President Milei's party, which is facing electoral challenges.

In a strategic move, Argentina's central bank has secured a $20 billion exchange rate stabilization agreement with the U.S. Treasury Department, announced just six days before a critical midterm election. This pact ensures bilateral currency swap operations, bolstering Argentina's ability to withstand potential market volatility.

Economy Minister Luis Caputo expressed hopes of finalizing this framework before the upcoming election, where President Javier Milei's party seeks to bolster its legislative presence. Milei, advocating for austerity and government downsizing, recently faced political hurdles from a more socially-centered opposition.

U.S. President Donald Trump's comments last week about possibly disengaging from Argentina if Milei loses were later softened by Treasury Secretary Scott Bessent, who reiterated U.S. financial support contingent on 'good policies' by Milei's government, regardless of the election results. Bessent also announced several peso purchases to stabilize confidence.

(With inputs from agencies.)