U.S. Treasury to Buy Argentine Bonds, Grant Loan
“The U.S. Treasury is ready to purchase Argentine dollar bonds and will do so as conditions warrant,” said Bessent.
Quick overview
- Scott Bessent announced that the U.S. is considering extending a stand-by credit to Argentina through the Exchange Stabilization Fund.
- The U.S. Treasury is prepared to purchase Argentine sovereign bonds in both primary and secondary markets as conditions allow.
- Bessent emphasized ongoing discussions with Argentina's government regarding a potential loan and tax exemption reforms for commodity producers.
- He also highlighted interest from U.S. companies in significant foreign direct investment in Argentina, contingent on favorable electoral outcomes.
Scott Bessent indicated that the U.S. could extend a stand-by credit to Argentina through the Exchange Stabilization Fund (ESF). He also mentioned the possibility of purchasing Argentine debt in both primary and secondary markets.
In addition to negotiations over a $20 billion swap line, the U.S. Treasury Secretary said on social media that Washington is “prepared to grant a significant stand-by credit through the Exchange Stabilization Fund” and to buy Argentina’s sovereign bonds.
“The U.S. Treasury is ready to purchase Argentine dollar bonds and will do so as conditions warrant,” the Trump administration official announced on Wednesday morning. He added that the U.S. is also “willing to buy government debt in both primary and secondary markets.”
Bessent reaffirmed that a loan to Argentina remains on the table: “We are prepared to provide a significant stand-by credit through the ESF and have held active conversations with President Milei’s team to make it happen.”
Tax Exemptions and Investment Plans
In his post on X, formerly Twitter, Bessent also outlined complementary measures: “We are working with the Argentine government to end tax exemptions for commodity producers who convert foreign currency.”
He noted that he has been in contact with “numerous U.S. companies planning significant FDI in Argentina across multiple sectors, contingent on a favorable electoral outcome.”
Bessent further asserted that “Argentina has the tools to defeat speculators, including those seeking to destabilize Argentine markets for political purposes.”
Inside the Exchange Stabilization Fund
According to official data, the ESF is valued at $219.4 billion. Of that, $23.5 billion consists of intragovernmental assets within the U.S. system, while $195.9 billion is tied to foreign holdings.
Within that foreign segment, around $5.7 billion is held in foreign currencies and short-term deposits or investments (up to three months) in euros and yen.
Another $173.7 billion is allocated to Special Drawing Rights (SDRs) from the IMF, an international reserve asset based on a basket of global currencies.
The remaining $16.5 billion is invested in medium- and long-term foreign government securities, also denominated exclusively in euros and yen.
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