Washington, October 10(HS): The United States has launched a $20 billion financial assistance plan to help stabilise Argentina’s struggling economy, a move that has drawn both praise and political backlash at home. The initiative involves direct US purchases of Argentine pesos in a bid to ease the country’s deepening currency crisis and bolster investor confidence.
US Treasury Secretary Scott Bessent announced the plan on social media, stating that Washington was “prepared to take exceptional measures” to prevent economic collapse in Buenos Aires. The decision, he said, stemmed from the belief that Argentina’s reform drive under President Javier Milei was “of systemic importance” and crucial to maintaining stability across the Western Hemisphere.
The announcement immediately lifted Argentina’s peso and debt markets but ignited fierce debate in the United States, where critics questioned the rationale behind providing such substantial support to a foreign ally amid domestic spending cuts. Democratic Senator Elizabeth Warren slammed the move as misguided, arguing that taxpayer funds should instead be directed toward healthcare and economic relief at home.
Bessent, once a prominent currency trader known for his role during the 1992 “Black Wednesday” crisis in Britain, defended the intervention as strategic rather than charitable. “A strong, stable Argentina is in the strategic interest of the United States,” he said, adding that the plan was no “bailout” but rather an instrument to maintain regional balance.
Argentina, led by Milei — a libertarian economist and close ally of US President Donald Trump — has been struggling with a severe economic downturn ahead of key midterm elections on October 26. The peso’s value has plunged in recent months, while inflation and public frustration with austerity policies have intensified.
Milei’s government has enforced deep spending cuts and deregulation to restore fiscal health, measures welcomed by investors and the International Monetary Fund but met with growing discontent among ordinary Argentines.In a statement, President Milei thanked Trump and Secretary Bessent for their “steadfast support,” calling the partnership a symbol of “economic freedom and hemispheric prosperity.”
However, opposition in the US continues to mount. Republican Senator Chuck Grassley questioned why Washington was assisting a key agricultural rival at the expense of American soybean farmers already hurt by Chinese trade shifts.
The Treasury has not disclosed details of the currency swap arrangement, under which Argentina will be able to exchange pesos for dollars. Bessent reiterated that the plan serves a national security purpose — preventing potential state failure in a crucial region. “Only the United States can act swiftly. And act we will,” he declared after concluding meetings with Argentine Economy Minister Luis Caputo.
Argentina has defaulted three times since 2001 and continues to navigate fragile finances despite progress in reducing inflation. The US-backed rescue plan, while boosting short-term market confidence, underscores a broader gamble — that Washington’s intervention can simultaneously safeguard its geopolitical interests and preserve a key ideological partnership in Latin America.
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Hindusthan Samachar / Jun Sarkar
