The United States Treasury says Argentina has repaid an emergency drawdown from a $20 billion swap line that helped stabilise the peso during last year’s market panic — and that the move left American coffers slightly richer.
Treasury Secretary Scott Bessent announced on social media that the Argentina operation has been “paid in full,” that the Treasury no longer holds any Argentine pesos, and that the intervention produced “tens of millions” in profit for US taxpayers. He framed the manoeuvre as both a market-stabilising action and a geopolitical win, calling it an “America First homerun deal.”
Why Washington stepped in
In October 2025 the peso plunged as investors fretted about political upheaval and the shockwaves from the rise of Javier Milei and his libertarian movement. Markets were jittery ahead of Argentina’s midterm contests, and capital flight threatened to tip a liquidity squeeze into a broader crisis.
The Treasury moved quickly, using its Exchange Stabilisation Fund to buy pesos and agreeing to a swap line that in theory could provide up to $20 billion of dollar liquidity. In practice Argentina traded roughly $2.5 billion of pesos for dollars, with the arrangement formally settled in December, according to government summaries. Separately, the US provided support tied to reserves the Argentine authorities held at the IMF, amounting to roughly $872 million.
That intervention appears to have helped steady the currency: the peso recovered as Milei’s party won big in the midterms and market confidence improved — at least temporarily.
A tactical success — and a strategic question
For Washington the operation checked a flight risk in a country whose instability could have reverberated through regional markets. Bessent and supporters point to the swift repayment and small profit as proof the action was both prudent and effective.
Critics were quicker to highlight political optics and risk. Some Democrats questioned whether the Treasury should have taken on the political and market risk of propping up a currency during a tumultuous domestic political moment in an ally of President Donald Trump. The move also prompted debate over whether US officials had overreached by intervening in a foreign election cycle’s economic undercurrents.
Financial analysts offered a more muted view: “Getting your money back is a straightforward definition of a success,” said Brad Setser, a senior fellow at the Council on Foreign Relations, while cautioning that the reported profit — tens of millions — is modest relative to the sums at stake.
What this leaves behind in Buenos Aires
The short-term calm masks deeper questions inside Argentina. The country’s central bank spent large amounts defending the peso in the run-up to the swap and leaned heavily on its reserves. That means Argentina still faces the hard work of rebuilding buffers, shoring up investor confidence and following through on monetary and fiscal reforms if it wants a durable recovery.
Some economists warn that the ready availability of external support can dull domestic urgency. If market participants expect another external backstop, political and policy incentives to shore up reserves could weaken — a risky dynamic for a nation with a long history of balance-of-payments crises.
At the same time, re-entry into international markets — even if tentative — matters. Argentina’s ability to borrow or attract private capital will hinge on whether investors see policy consistency and a credible path to stabilisation.
Bigger-picture implications
The episode matters beyond Buenos Aires. It illustrates Washington’s willingness to use financial tools as a lever in regional politics and markets, part of a broader posture officials describe as promoting stability through economic strength. For market participants, the intervention is also a reminder that sovereign FX stress sometimes draws fast and unconventional responses from major powers — a dynamic that can shape asset flows and risk pricing.
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This episode will probably be filed in two ways: as a narrowly successful market operation — cash returned, taxpayers made a small profit — and as a test of longer-term resilience. Argentina’s near-term stability may have been bought; the cost, for now, is not just dollars but the political and economic work still required to make that stability stick.