Historic: US Treasury Intervenes in Argentine Currency Markets: Peso Is 'Undervalued'

U.S. Treasury Secretary Scott Bessent revealed that the institution had directly purchased pesos to stabilize the national exchange market in Argentina and support the policies of President Javier Milei. He framed the intervention as an investment, stating that the Argentine peso was undervalued.

U.S. Treasury Purchases Argentine Pesos to Support Exchange Market Stability

The U.S. Treasury has completed a series of historic moves to support the monetary stability in Argentina. U.S. Treasury Secretary Scott Bessent revealed that the institution had intervened directly in the Argentine currency market by purchasing pesos at a moment when the nation faced moments of “acute illiquidity.”

In social media, Bessent acknowledged that while the International Monetary Fund (IMF) was also behind Argentina’s prudent fiscal policies, it could not act swiftly.

While Bessent did not disclose the figures linked to the intervention, he did highlight that he was “prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets.”

In addition, he also revealed that the previously announced $20 billion currency swap agreement had been finalized after 4 days of intensive discussions with Argentine Finance Minister Luis Caputo and his team.

In an interview with Fox News, Bessent framed the intervention in Argentine FX markets as a good investment, referring to the nation’s positive future.

He stated:

Argentina is a beacon in Latin America. This isn’t a bailout; it’s buying low and selling high. The peso is undervalued.

Nonetheless, Bessent’s actions and Trump’s support of Milei were criticized heavily, with some linking the measures to helping Rob Citrone, a former colleague and friend of Bessent. Citrone, founder of hedge fund Discovery Capital, is heavily invested in Argentine bonds and played a part in closing the $20 billion currency swap agreement, according to Argentine press reports.

Senator Elizabeth Warren also called out the measure. “Instead of using our dollars to buy Argentine pesos, Donald Trump should help Americans afford health care,” she stated.

The U.S. Treasury hinted at new interventions, as Bessent stated that the U.S. was “committed to strengthening our allies who welcome fair trade and American investment.”