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Treasury signs a $20B Argentina swap that shores up bonds held by Bessent’s allies
Treasury Secretary Scott Bessent announced on October 9, 2025 that Treasury had bought Argentine pesos and finalized a $20 billion swap line with Argentina’s central bank from the Exchange Stabilization Fund, ahead of the October 26 midterm elections. The central bank said it signed on October 20.
What happened
In September 2025 Argentina’s peso and bonds fell sharply as President Javier Milei’s party lost a provincial election. On October 9, Bessent announced that the United States had bought pesos directly and completed a $20 billion swap line with Argentina’s central bank. He used the Exchange Stabilization Fund, a Treasury account that does not need congressional approval.
Argentina’s central bank announced the signed agreement on October 20, six days before Argentina’s midterm elections. Bessent also said he was arranging a further $20 billion from private banks.
Bloomberg reported that Discovery Capital, the hedge fund run by Rob Citrone, had bought more Argentine bonds during the selloff and was up more than 20% on the year. Citrone worked with Bessent at Soros Fund Management. Large asset managers held the debt too. Bessent said it was “false” that the package served American investors, and in November said the government had made money on it.
Who benefited
Holders of Argentine debt saw their bonds recover when the U.S. Treasury stood behind the peso, among them Bessent’s former partner. Milei won his election with the United States visibly behind him.
Who wanted something
Milei, whom Trump has embraced as an ally, and the investors who had bet on him. Bessent, a former hedge-fund manager, described the facility as a bridge for a reformer. Treasury has said it was repaid with a profit.
Who lost out
The risk sat with U.S. taxpayers through the Exchange Stabilization Fund, which Congress did not vote on. American farmers complained at the same time that Argentina was selling soybeans to China that they could not. Whether the swap cost the public anything depends on Treasury’s accounting, which it has not published in detail.
Why it matters
A cabinet secretary used an emergency fund to backstop a foreign market in which his old partner had just doubled down, without Congress. It may have been good policy. No one outside Treasury can check whose bets it protected.
Sources AP (via NBC News)Al JazeeraBuenos Aires TimesPopular Information