Bessent on Monday said Washington would consider purchases of Argentina’s currency or sovereign debt by a fund controlled by the US Treasury, adding “all options” were on the tab
“We’re sending a message that if you do the right thing, if you follow good policies, that if you’re aligned with the values of the United States . . . we are willing to provide assistance when things move out of equilibrium,” Bessent said in comments to reporters and on social media. In a post on X on Monday, Milei said: “Enormous thanks to @SecScottBessent and President @realDonaldTrump for their unconditional support for the Argentine people, who two years ago chose to turn the page on a century of decay, with great effort.” “Those of us who defend the ideas of freedom must work together for the well being of our people,” he added.
Argentina has a long history of bad leaders, corruption and monetary messes- Milei is another in a long line of the same old. A bit of history here
Argentina’s markets have tumbled since Milei’s party fared far worse than expected in elections in the province of Buenos Aires, ahead of midterm polls in October.
The surprise (not really) result, combined with a corruption scandal and congressional defeats, has fuelled concern among investors about his ability to maintain support for his free market reforms. The peso has plunged to the lower limit of its exchange rate band, and the central bank was forced to spend $1.1bn in three days last week to defend it. Prices of Argentina’s dollar bonds have fallen sharply as investors took fright at how quickly Milei’s government was burning through its foreign currency reserves. Bonds due in 2029 and 2035 rallied by 6 cents to 7 cents in the dollar to 71 cents and 55 cents, respectively, after Bessent’s comments. The peso’s official exchange rate, which had plunged 11 per cent in the past two months, was up 3.7 per cent on Monday afternoon compared to Friday’s close, while the black market peso rose 4.5 per cent.
Milei is turning to the US after tapping $20bn from the IMF this year,(not a first for Argentina- check the history) stretching the fund’s capacity for further bailouts to the limit. Argentina had missed initial IMF targets to rebuild foreign exchange reserves before heavy intervention last week.
From 2023
With tousled hair, often sporting leather jackets and singing rock songs ( and wielding chain saws) at his boisterous political rallies, Milei – an admirer of former US President Donald Trump – wants to purge politics of what he calls “thieves”.
And yet there he was!