The United States has purchased Argentine pesos on the open market and is establishing a $20bn facility to invest in Argentine sovereign debt, Treasury Secretary Scott Bessent confirmed on October 15. Combined with the initial $20bn currency swap line, total US support for Argentina would reach $40bn.

Bessent described the arrangement as "a private-sector solution to Argentina’s coming debt payments."

Argentine markets responded positively, with the benchmark Merval index surging 10% during the trading session. Local stocks closed up 1.7% after rising over 4% earlier, while international dollar bonds gained ground. The Argentine peso declined 1.7% to 1,378 per dollar.

While President Donald Trump initially suggested US support would hinge on President Javier Milei's performance in the upcoming midterm elections, Bessent said the assistance is "policy-specific" and will continue "as long as Argentina continues enacting good policy."

“A win [for Milei in the mid-terms] would entail keeping a blocking level on any bad policy, for the president to be able to veto the policies. And so [the aid] is not election-specific; it is policy-specific," he said in a bit to clarify Trump's earlier comments.

This assurance comes as Milei faces a challenging electoral landscape. Polls show a tight race between his La Libertad Avanza party and Peronist Fuerza Patria, with LLA trailing by over 10 points in Buenos Aires province. Political scientist Gustavo Marangoni told AFP that Milei has "no chance of winning a majority," estimating his party would capture approximately one-third of available seats.

Central Bank President Santiago Bausili confirmed the $20bn currency swap would be operational within two weeks, following intensive documentation work. "We've been working for the past two weeks, essentially day in and day out, with full dedication to complete the documentation associated with the swap, and we hope to be able to execute the free market agreement containing the terms of the swap very soon," Bausili told Infobae.

This substantial US financial package represents a critical lifeline for Argentina, which has defaulted on its sovereign obligations three times since 2000, as it seeks to cover foreign currency debt payments in 2026. However, the conditional nature of US support hinted at by Trump poses a major challenge for the libertarian administration.

“The current strategy is extremely fragile,” Barry Eichengreen, a professor of economics and political science at the University of California, Berkeley, told NBC News.

“Even if Argentines manage to skate through thin ice this time, there are always more bumps in the road."

Argentina also enjoys the backing of the IMF, with a $44bn programme renegotiated last April which granted a further $20bn Extended Fund Facility (EFF). Bloomberg estimates Buenos Aires' current exposure to the fund to be around $55bn.

Argentines will go to the polls on October 26 to elect half of the seats in the Chamber of Deputies and a third of the seats in the Senate, where Milei currently lacks the support needed to advance his bold economic plans.

Bessent, who recently described Argentina as a "systemic ally" of the US, expressed confidence that Milei's right-wing coalition would "do quite well and continue his reform agenda."