Scott Bessent Confirms Argentina Swap Activation: “We’re Already Profiting”
In remarks to MSNBC on Tuesday, Bessent said that “a small portion” of the swap line had been used and added, “We’ve already made gains."
Quick overview
- U.S. Treasury Secretary Scott Bessent confirmed that part of the currency swap agreement with Argentina has been activated, generating profits.
- Bessent noted that the U.S. used its balance sheet to help stabilize Argentina's economy and support the peso.
- Recent reports suggest that the U.S. Treasury may have sold peso-denominated notes, indicating the swap arrangement's activation.
- Market speculation indicates that $2.7 billion from the swap may have been used to reimburse the U.S. Treasury for its interventions in Argentina's foreign exchange market.
U.S. Treasury Secretary Scott Bessent confirmed in a televised interview that part of the currency swap agreement between the United States and Argentina has been activated, adding that the operation has already generated a profit.
In remarks to MSNBC on Tuesday, Bessent said that “a small portion” of the swap line had been used and added, “We’ve already made gains from it.” He also noted that the U.S. used its balance sheet to help stabilize Argentina, referring to recent interventions aimed at supporting the peso.
As previously reported by media outlets, the latest weekly balance sheet from Argentina’s Central Bank (BCRA) hinted that the U.S. Treasury may have sold its holdings of peso-denominated notes issued by the monetary authority, suggesting that the swap arrangement had indeed been activated.
Bessent’s statements come as the market continues to watch Argentina’s fragile foreign reserve levels, which analysts estimate could have fallen to around $12 billion in the red if the swap activation is fully accounted for.
Market speculation suggests that $2.7 billion from the swap may have been used to reimburse the U.S. Treasury for the dollars it spent intervening in Argentina’s foreign exchange market (MLC) ahead of the midterm elections.
The U.S. Treasury has reportedly purchased pesos directly in the local market on several occasions this year to ease exchange rate pressures during periods of heightened electoral uncertainty.
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