The United States bought Argentine pesos, the next step in a controversial attempt to calm a currency crisis plaguing the South American country and its president, Trump ally Javier Miley.
Treasury Secretary Scott Bessent announced the purchase on social media, saying the US had finalized the terms of the country's planned $20bn (£15bn) financial rescue.
“The U.S. Treasury stands ready to immediately take any exceptional measures that are necessary,” he said.
The announcement boosted Argentina's peso and debt in financial markets but reignited debate in the United States, where the decision to provide financial support to Argentina during a period of domestic spending cuts has drawn scrutiny.
“Instead of using our dollars to buy Argentine pesos, Donald Trump should help Americans afford health care,” Democratic Senator Elizabeth Warren wrote on social media in response to the statement, referring to a key issue causing controversy over US government shutdown.
Argentina faces growing financial turmoil ahead of national mid-term elections scheduled for Oct. 26, as questions arise over whether voters will continue to support Milea's spending-cutting and free-market reform agenda after recent defeats in provincial elections.
The value of the peso has fallen sharply in recent months as investors dumped Argentine stocks and bonds.
Miley's government tried to stabilize the situation, but the moves depleted the country's reserves months before billions of debts were due to be repaid.
Bessent, who rose to fame as a currency trader involved in the 1992 Black Wednesday episode that forced the UK to devalue the pound, says the statement that the success of Argentina's “reform program” was of “systemic importance.”
“A strong and stable Argentina that helps anchor a prosperous Western Hemisphere is in the strategic interests of the United States,” he added. “Their success must be a bipartisan priority.”
The Treasury Department did not respond to questions seeking more details about U.S. support, including how many pesos the administration has purchased or the terms of a $20 billion currency swap line that will allow Argentina to swap pesos for dollars.
Speaking later on Fox News, Bessent said that this support was not a salvation for Argentina and that the peso was undervalued.
In her social media post, Miley thanked Trump and Bessent for their support.
“Together, as our closest allies, we will create a hemisphere of economic freedom and prosperity,” he said.
Argentina has defaulted on its debt three times since 2001, including most recently in 2020.
But investors, including those with ties to Bessent such as Robert Citron, have renewed interest in the country in recent years, betting on Milea's libertarian financial reforms.
Since taking office in 2023, he has introduced deregulation and sharp cuts in government spending to curb inflation and achieve a budget surplus – when the government spends less than it receives in revenue.
Domestically, the austerity measures have met with growing backlash as people's purchasing power falls and the country faces a likely economic recession.
But the measures have helped curb inflation and have been largely welcomed by international investors and the International Monetary Fund, Argentina's key creditor.
Miley's positioning of themselves as a Trump-like figure, coupled with their “Make Argentina Great Again” rhetoric, has also won them the admiration of many conservatives in the US. He has met with Trump multiple times and is expected to visit again next week.
However, the decision to provide financial support to Argentina caused a backlash among American farmers, a key part of Trump voters, who were concerned that China was shifting soybean purchases to countries including Argentina.
“Why would the US help Argentina while they are taking over the largest market for US soybeans???” Republican Sen. Chuck Grassley, who represents key soybean producer Iowa, wrote on social media last month when the U.S. first announced its support.
Bessent's statement followed four days of meetings with Argentine Economy Minister Luis Caputo.
In a statement, Bessent said the international community “stands united in supporting Argentina and its prudent financial strategy, but only the United States can act quickly. And we will.”
He previously dismissed suggestions that the support represented aid to what Warren called the administration's “billionaire buddies” in a statement Thursday.
“This stereotype that we're helping wealthy Americans with interests there couldn't be more false,” Bessent told CNBC earlier this month.
“What we are doing is supporting U.S. strategic interests in the Western Hemisphere,” he said, warning that inaction could lead to a “failed state.”