Argentina Markets Soar After US Treasury Pledges Support

Argentina markets soar after US Treasury pledges support The city of Buenos Aires gets ready for the runoff election · Reuters Rodrigo Campos Mon, September 22, 2025 at 8:02 AM PDT 3 min read 4 In this article: DX-Y.NYB +0.02% By Rodrigo Campos NEW YORK (Reuters) -Argentine financial assets rallied on Monday, with stocks rising the most in six months, international dollar bonds up more than 6 cents and the peso strengthening after Washington pledged full support for Argentina's right-wing government ahead of key midterm elections next month. U.S. Treasury Secretary Scott Bessent said "all options" are on the table for stabilizing Argentina, including swap lines and direct currency purchases, while underscoring President Donald Trump's confidence in Argentine President Javier Milei and his economic team. Bessent told reporters after earlier announcing support for Argentina on social media that any U.S. action would be "large and forceful," but said no steps would be taken until after he and Trump meet with Milei in New York on Tuesday. Argentine markets have fallen sharply in recent weeks, with international bonds down more than 20% for the year through Friday. The peso has been pressing against the weaker limit of a band set months ago, as corruption allegations inside Milei's circle and a larger-than-expected loss in a local election in Buenos Aires triggered investor concern over Milei's ability to reshape the economy. "Argentina's assets were in desperate need of a circuit breaker — and they just got one," said Alejo Czerwonko, CIO for emerging markets in the Americas at UBS. "Bessent's intervention carries outsized weight at this fragile juncture. It provides the Milei administration with a critical window to reorient ahead of October's midterms." A favorable political outcome for the government in the October election would go a long way toward containing investor anxiety ignited by the Buenos Aires vote earlier this month, Czerwonko added. MARKET RALLY IS A REBOUND An index of Argentine stocks traded in U.S. exchanges rose 14%, and the local benchmark gained 7% Monday after falling more than 15% over the past two weeks. Earlier, the Argentine government said it would remove export taxes on all grains through next month, aiming to increase sales and boost the supply of dollars to meet demand from institutional investors. That means the tax will be removed past the midterm election on October 26. "Is this the 'whatever it takes' moment for Argentina?" said Armando Armenta, senior economist at AllianceBernstein, alluding to pivotal support from former ECB chief Mario Draghi to the euro experiment back in 2012. "Seems like Milei is getting the support to avoid a financial crisis ahead of the midterm election and ensure a smoother transition into 2026."