Finalizing a $20 billion lifeline for Argentina using taxpayers’ funds during the government shutdown was an essential action for the agency, Treasury Secretary Scott Bessent said Tuesday.
His remarks came in response to a letter from Sen. Elizabeth Warren, the ranking member of the Senate Banking Committee, who wrote to Bessent a week prior requesting an explanation as to why the Treasury Department was working on the Argentinian lifeline during a shutdown of the federal government that has restrained resources.
“We have been forced to prioritize mission-critical efforts necessary to the discharge of the President’s constitutional duties — including national security and global financial stability,” Bessent wrote to Warren, in a letter the senator shared exclusively with CNN.
The $20 billion lifeline framework Bessent announced earlier this month is known as a “currency swap,” which gives Argentina’s central bank the ability to exchange pesos for US dollars with the Treasury. Doing so can help stabilize its financial markets by injecting more liquidity. Effectively, though, it’s a loan from the US government.
The Argentine peso has significantly devalued against other currencies since President Javier Milei, a close ally of President Donald Trump, suffered major defeats in local elections, raising doubts that he’ll hold on to his legislative majority in midterm elections later this month. Trump said last week future efforts to boost the Argentine economy would be contingent on the election results.
But on top of questions Trump has faced on the rationale for an economic rescue of the South American country, a looming concern is whether the efforts have been successful.
While the Argentine peso initially rose following Bessent’s announcement, the currency set a fresh low earlier this week, suggesting more work could be needed to stabilize it.
Warren also questioned Treasury’s plans to work with private-sector banks to generate a $20 billion loan to Argentina on top of the $20 billion rescue package from the government.
Bessent, in his response, did not directly address her questions regarding private-sector involvement. The Treasury Department didn’t respond to CNN’s inquiry.
Bessent has spent much of this week meeting with foreign finance ministers in Malaysia. Last week, Bessent said he’d be meeting with Chinese Vice Premier He Lifeng in Malaysia, as trade tensions between Washington and Beijing have recently escalated.
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