Argentina Repays $20 Billion Credit Line from Trump Administration, U.S. Treasury Secretary Scott Bessent Announces

Argentina has repaid the funds it drew from a $20 billion credit line with the Trump administration, U.S. Treasury Secretary Scott Bessent announced on January 9. The move is a critical step in stabilizing Argentina's economy under President Javier Milei. The repayment included payments to bondholders and marked a full return of the limited draw from the swap line.

The Treasury's report indicated that Argentina's central bank had used $2.5 billion of the facility by the end of October. The Argentine Central Bank confirmed the repayment and termination of the swap agreement. This repayment eliminates the U.S. Exchange Stabilization Fund's exposure to Argentine pesos.

U.S. Treasury Secretary Scott Bessent hailed the repayment as a justification for the Trump administration's support of Argentina. The intervention was a controversial move that sparked debate in the U.S. over the use of taxpayer funds and the consistency of America First policy.

Why Did This Happen?

The $20 billion swap line was established in October 2025 to provide liquidity to Argentina ahead of crucial midterm elections. The Trump administration saw Argentina as a strategic ally under President Javier Milei's libertarian reforms. The move also aimed to prevent a market collapse that could undermine economic stability in the region.

Argentina's government used the funds to repay debt to the International Monetary Fund and to stabilize the peso ahead of the election. Milei's administration won a major legislative victory, reinforcing support for its austerity measures and debt repayment strategy.

How Did Markets React?

The repayment was seen as a positive signal to investors. Argentina issued a dollar bond for the first time in eight years in December 2025, indicating a return to international capital markets. This move was supported by a significant drop in Argentina's sovereign risk spreads.

The S&P MERVAL Index rose 1% following the announcement, and the Global X MSCI Argentina ETF was down slightly. Argentina's central bank also secured a $3 billion repo deal with international banks ahead of a $4.3 billion debt payment.

What Are Analysts Watching Next?

Despite the progress, Argentina's foreign exchange reserves remain low. The country faces further strain from upcoming debt repayments and IMF loan obligations. Analysts are closely monitoring how Argentina manages these financial pressures while continuing its economic reforms.

The U.S. Treasury's decision to support Argentina was criticized for its opacity and lack of conditions. However, the repayment has been described as a win for both Argentina and the U.S., with potential profits for American investors.

The repayment of the swap line is a significant milestone in Argentina's economic stabilization. The move reflects a broader shift in Argentina's economic policy and its alignment with U.S. interests in the region.