US Treasury Secretary Scott Bessent expressed the administration’s willingness to offer Argentina a credit line through the Exchange Stabilization Fund if needed, contingent on President Milei’s economic policies. Following this announcement, Argentine bonds rose significantly in market performance, reflecting increased investor confidence amidst political and economic reforms. Bessent’s comments signify ongoing US support crucial for Argentina’s economic stability.
Scott Bessent, the US Treasury Secretary, indicated that the Trump administration would be ready to provide Argentina with a credit line in case of a global crisis endangering President Javier Milei’s economic initiatives. He mentioned the possible use of the Exchange Stabilization Fund (ESF) to assist Argentina, contingent upon Milei maintaining his economic strategies. These comments were made during a JPMorgan Chase & Co event in Washington, as reported by three individuals familiar with the matter.
Following Bessent’s remarks, Argentine bonds experienced a notable rise, performing well within emerging markets. Notably, benchmark notes due in 2035 increased by one cent, trading at approximately 66 cents on the dollar, according to Bloomberg’s pricing data. Analysts attributed the uptick in Argentine assets to Bessent’s supportive statements.
Carolina Gialdi, a sales head at Max Capital in Buenos Aires, noted, “Bonds rose because there’s an increasing expectation that the US will have Milei’s back in the case of a crisis.” She elaborated that mitigating a crisis could alleviate the political concerns regarding the potential return of Peronism to power, which has historically influenced Argentine politics.
The ESF, established in the 1930s, has facilitated over a hundred loans and credits by the US Treasury aimed at stabilizing foreign currencies, as outlined on the Treasury’s official website. Bessent’s recent statements build on previous comments made during his prior visit to Buenos Aires, where he commended Milei’s reform agenda as exemplary for other pro-market regimes in Latin America.
In an earlier interview, Bessent mentioned, “At the end of the day, we have the Exchange Stabilization Fund, too. We haven’t committed to being part of that, but could be,” hinting at the potential for future financial support. The Trump administration’s support has been pivotal in enabling Argentina to engage in a $20 billion program with the International Monetary Fund (IMF) this month.
In summary, US Treasury Secretary Scott Bessent has indicated potential US financial support for Argentina if economic challenges arise. This includes the possibility of utilizing the Exchange Stabilization Fund to assist in stabilizing Argentina’s economy, conditional on President Milei’s policy adherence. The markets reacted positively to these prospects, evident in the rise of Argentine bond values. Support from the US has historically been vital for Argentina’s economic maneuvers, including its recent IMF agreement.
Original Source: batimes.com.ar
