"Last month, the US treasury secretary, Scott Bessent, vowed to do whatever it takes to support Argentina's rightwing president, Javier Milei, a key ally of Donald Trump. Markets aren't convinced. On Tuesday, the peso plunged by more than 6% before a central bank intervention clawed back losses. Argentine stocks abroad fell 7%, and the risk premium on its debt rose to 12.3 percentage points far beyond sustainable borrowing levels."
"Mr Bessent admitted the aid was meant to prop up Mr Milei after his La Libertad Avanza (Freedom Advances) party lost decisively in a key election last month. But no terms have been confirmed. With US Republicans angry over Mr Milei's tax breaks for soy farmers that undercut US producers, markets are asking the obvious: is the Bessent bazooka real, or just for show?"
US treasury secretary Scott Bessent pledged to do whatever it takes to support Argentina's rightwing president Javier Milei, prompting market skepticism. The peso plunged over 6% before central bank intervention, Argentine stocks abroad fell 7%, and the risk premium on Argentina's debt rose to 12.3 percentage points. Bessent acknowledged the aid aimed to prop up Milei after his La Libertad Avanza party's decisive election loss, yet no terms have been confirmed. US Republicans object to Milei's tax breaks for soy farmers, and critics note the optics of domestic funding shortages while $20bn may be pledged overseas. Milei's shock reforms have driven wage declines, industrial collapse and cuts to pensions and disability support amid corruption allegations.
Read at www.theguardian.com
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