Currency pact as an election campaign donation Trump intervenes - 20 billion for the president with the chainsaw
Shortly before the parliamentary elections, Argentina's President Javier Milei is receiving support from Washington: the US Treasury Department has concluded a currency swap agreement worth 20 billion dollars with the Argentine Central Bank. For Milei, the deal is a political gift - and a signal of American support.
10.10.2025, 05:56
10.10.2025, 10:07
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- The USA and Argentina have signed a currency swap agreement worth 20 billion dollars.
- The agreement is intended to stabilize Argentina's financial markets and secure liquidity.
- President Milei thanks Donald Trump for "vision and leadership" - just before the crucial general election.
The US Treasury Department has signed a currency swap agreement worth 20 billion US dollars with the Argentinian central bank. The support is intended to bring stability - shortly before the parliamentary elections.
After four days of talks, US Treasury Secretary Scott Bessent declared on X: "The US Treasury is prepared to immediately take any extraordinary measures necessary to stabilize the markets."
In a currency swap, two countries or their central banks exchange their currencies for a certain period of time. This is basically intended to create currency liquidity, which can be useful for commodity or financial transactions. Another possible advantage is that the contracting parties can protect themselves against risks from fluctuations on the financial market with the stable exchange rate that such a deal can bring.
Milei thanks Trump
The agreement now enables the Argentinian central bank to exchange dollars for pesos at short notice and thus secure liquidity. The exact terms of the agreement initially remained unclear.
Argentina's President Javier Milei thanked the USA and President Donald Trump "for their vision and decisive leadership". Following the announcement of the measure, Argentine government bonds rose by around ten percent, share prices increased by 15 percent, while the peso gained in value.
Central bank had already intervened massively in the market
The ultra-liberal head of state, who has been in power since December 2023 and is often referred to in Argentina as the "president with a chainsaw" due to his tough austerity measures, regularly has to intervene in the foreign exchange market to support the national currency. Only recently, the central bank sold 678 million US dollars in a single day in the biggest intervention for six years.
Milei's party La Libertad Avanza (Freedom Advances) suffered a heavy defeat in the elections in the province of Buenos Aires a month ago. The vote was also seen as a mood test for the parliamentary elections at the end of October. Milei wants to achieve a significantly better result then, as he does not yet have his own majority in the Chamber of Deputies or the Senate. This is why his reform projects in Congress have been repeatedly halted.
