Bessent calls $20 billion lifeline for Argentina ‘critical’ Treasury function during shutdown

His remarks followed a letter from Sen. Elizabeth Warren, the ranking member of the Senate Banking Committee, who wrote to Bessent a week earlier seeking an explanation for why the Treasury Department was working on the Argentine lifeline during a federal government shutdown that has restricted its resources.

“We have been forced to prioritize mission-critical efforts necessary to carry out 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 Bessent lifeline framework announced earlier this month is known as a “currency swap”, which gives the Argentine central bank the ability to exchange pesos for US dollars with the Treasury. This can help stabilize its financial markets by injecting more liquidity. But in reality, it is a loan from the US government.

The Argentine peso has devalued significantly against other currencies since President Javier Milei, a close ally of President Donald Trump, suffered major defeats in local elections, raising doubts whether he will retain his legislative majority in midterm elections later this month. Trump said last week that future efforts to boost Argentina’s economy would depend on the election results.

But in addition to the questions Trump has faced over the justification for an economic bailout of the South American country, a major concern is whether the efforts have been successful.

While the Argentine peso initially rose following Bessent’s announcement, the currency hit a new low earlier this week, suggesting additional efforts may 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 government’s $20 billion bailout plan.

Bessent, in his response, did not directly answer his questions regarding private sector participation. The Treasury Department did not respond to CNN’s inquiry.

Bessent is expected to meet Chinese Vice Premier He Lifeng in Malaysia, as trade tensions between Washington and Beijing have recently escalated.