In October, the U.S. Treasury agreed on a $20 billion exchange-rate stabilization arrangement with Argentina. That support was meant to be matched by a bank-funded debt facility of the same size, a deal announced just days before crucial midterm elections for President Javier Milei’s administration.
Bankers now say that large-scale debt facility is no longer being seriously pursued. Instead, lenders including JPMorgan Chase, Bank of America and Citigroup are working on a roughly $5 billion short-term repurchase (“repo”) facility, which would provide immediate liquidity while limiting the banks’ long-term exposure.
The fresh funds are expected to help cover a debt payment of around $4 billion due in January, though discussions remain at an early stage and the structure or size of the package could still change, or be abandoned altogether.
The banks involved have declined to comment publicly on the revised plan. Earlier this month, JPMorgan’s chief executive said a large loan to Argentina “may not be necessary,” but indicated the bank could still consider providing special financing if needed. Argentine officials have not yet responded publicly to the latest developments.
The U.S. administration has been a firm political supporter of Milei’s economic overhaul. Since taking office, his government has moved to sharply reduce runaway inflation that had reached triple-digit annual rates. However, Argentina’s foreign currency reserves remain thin, and the country was rapidly burning through dollars before the recent U.S. backing, leaving it heavily dependent on external support to meet near-term obligations.
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