deal

Bailout for Argentina: why Donald Trump signed a US$20-billion Swap Deal with Javier Milei

On Sunday, US President Donald Trump outlined the economic and political support his administration is offering to Javier Milei's government. The US president made his remarks aboard Air Force One, just one week before Argentina's legislative elections, scheduled for Sunday, October 26.What kind of financial assistance did Argentina receive from the US?On Monday, the Central Bank of Argentina (BCRA), under the leadership of Santiago Bausili, announced the signing of a currency stabilization agreement with the U.S. Treasury Department. This pact represents direct financial backing from the U.S. administration for President Javier Milei's administration.The nature of this understanding is a line of liquidity, strategically designed to strengthen the country's economic position during a challenging period. This type of agreement underscores bilateral collaboration in an area critical to national stability.The peso has been fluctuating wildly ahead of the vote, disrupting the savings and spending plans of Argentinians, who fear it could lose even more value in the coming weeks.Inflation, which Milei had initially managed to stem after taking office in December 2023, has been rising again month-on-month.How much money is the United States bailing out Argentina with?The exchange rate stabilization agreement amounts to up to US$20 billion. Its main purpose is to substantially strengthen Argentina's international reserves position, a fundamental pillar for economic strength and market confidence.The potential availability of this sum seeks to generate peace of mind and predictability among economic actors, providing a robust financial cushion to mitigate any exchange rate pressures or external shocks.Spanish to English version by Bárbara Santana VázquezThis content was produced by a team at LA NACION with the assistance of AI.