In coordination with the US Treasury, Wall Street banks are analyzing an emergency loan, which would be backed by Argentine assets. The package would complement the currency swap created by the Trump administration.
In a new gesture of financial support towards Argentina, four leading US banks, between them JP Morgan, Bank of America, Goldman Sachs and Citigroup, They already have conversations with him US Department of the Treasury to grant up to US$20,000 million in loans to the countryas revealed this Thursday by Semafor, an American media specialized in economics and global politics.
The objective is complement the official assistance of a swap of another US$20,000 million, already announced by the administration of donald trumpat times when the economic stagnation and exchange rate instability They deepen a few days before the legislative elections of October 26.
The Secretary of the Treasury, Scott Bessentconfirmed on Wednesday that The private package could be “attached” to the official financing of the North American Government. “We are working on a $20 billion loan that would be alongside our swap line, with private banks and sovereign funds that, I think, would target the debt market more,” he told reporters in Washington. “So that would total US$40,000 million for Argentina”, accurate.
However, The continuity of the support could be tied to the electoral result and the re-election of Javier Mileias Trump himself indicated last Tuesday. “If they lose, we will not be generous with Argentina“said the American president, in a phrase that resonated strongly in the markets and generated a general drop in Argentine stocks and bonds. In parallel, Bessent reported that The US bought pesos in the market again on Wednesday, as part of the scheme indirect intervention to try to stabilize the Argentine peso.
This Thursday, meanwhile, The US Treasury intervened again, through a private bank of US origin (in the market they talk about Citi), sweeping currency buying positions and causing a close well below the levels operated for much of the day, they commented from a trading desk.
Emergency loan and Argentine assets as collateral
According to sources cited by Semafor, the banks are analyzing the possibility of structuring a emergency credit backed by Argentine assetsalthough details about the collateral have not yet been defined.
During the World Economy Summit organized by Semafor, the president of Goldman Sachs, John Waldronavoided referring to the Argentine case, but noted: “We do what we can to help in situations like this, as long as it is in the interest of the US Government”.
For his part, the US Treasury advisor, Joe Lavorgnastated that an eventual private loan package would “another way to reinforce and consolidate the support that Argentina needs in the short term”, while defining the country as “a key ally in the region”.
Exchange tension does not subside, despite the intervention of the US Treasury
The news comes amid a renewed exchange rate tensionwith the wholesale dollar already above $1,400 and a record coverage demand by local investors. The Argentine government is betting that the support of Washington and the North American financial system allows to relieve pressure on the peso and strengthen the Central Bank’s reserves. However, the market believes that this will come with a readjustment in the exchange rate scheme after the legislative elections at the end of October, regardless of the result.
If finalized, the combined financing package -between public and private funds- could exceed US$40,000 millionconfiguring the largest external aid to Argentina since the agreement with the IMF in 2018.
Source: Ambito
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