Argentina Secures $20bn Currency Swap Deal With US Ahead of Midterm Vote

Argentina’s central bank has signed a $20bn currency swap agreement with the U.S. Treasury Department, a deal aimed at stabilizing the peso just days before a crucial midterm election that could reshape the country’s political balance.

In a brief statement Monday, the Central Bank of the Argentinian Republic (BCRA) said the agreement establishes terms for “bilateral currency swap operations” with the United States but gave no further technical details.

The central bank described the pact as part of a broader effort to “expand its set of monetary and exchange rate policy instruments, including the liquidity of its international reserves.” The announcement came as the peso fell 1.7 percent to a record low of 1,475 per dollar.

While Washington has yet to issue its own statement, U.S. Treasury Secretary Scott Bessent said last week that the swap line would be backed by International Monetary Fund Special Drawing Rights (SDRs) held in the Treasury’s Exchange Stabilization Fund and converted into dollars.

Bessent stressed that no new conditions would be imposed beyond President Javier Milei’s commitment to fiscal austerity and pro-market reforms.

“Good policies will continue to be the basis for cooperation,” he said, emphasizing that the deal was designed to strengthen Argentina’s financial stability.

The swap marks one of the largest bilateral arrangements of its kind in recent years and could give the Milei administration critical breathing room to manage its foreign reserves and counter currency volatility.

Economy Minister Luis Caputo said last week he hoped to finalize the framework before the October 26 midterm elections, where Milei’s party is seeking to expand its presence in Congress.

The libertarian president, who rose to power promising deep spending cuts and the downsizing of Argentina’s state, has faced a series of political setbacks in recent months. Yet the new U.S. agreement may bolster his economic credibility ahead of the vote.

President Donald Trump, meanwhile, signaled that Washington’s support is conditional on continued reforms.

“We’re not going to waste our time if Milei’s people lose,” he said last week, a remark that briefly rattled markets until Bessent clarified that support would depend on “sound policy, not politics.”