Argentina Repays $2.5 Billion US Loan from Milei Rescue

The Argentine government has successfully closed a chapter of external financing by returning funds originally received from the United States. The repayment covers a specific tranche of a larger currency exchange agreement, known as a swap, which was activated in October of the previous year. This timing was crucial, as the funds were deployed to assist President Javier Milei ahead of the midterm elections.

According to the announcement, the specific amount cancelled totals approximately 2.541 billion dollars. This figure represents the portion of the swap that was actively utilized by the previous financial operations. The total framework of the agreement between the two nations allows for up to 20 billion dollars in liquidity, though only a fraction was drawn down and subsequently repaid.

To meet this significant financial obligation, the administration led by Javier Milei had to secure alternative financing. The government took on new debt specifically to cancel the outstanding balance owed to the United States. This strategic borrowing was directed toward international organizations rather than extending the liability with the original partner.

This approach highlights the administration's current fiscal policy of restructuring liabilities. By engaging with international bodies, the government aims to manage its sovereign debt profile while maintaining liquidity. The transaction demonstrates a shift in borrowing sources, moving from bilateral currency swaps to multilateral lending arrangements.

The transaction was formally verified by multiple high-level entities. Scott Bessent, serving as the Secretary of the Treasury for the United States, publicly stated that the South American country had paid back the utilized funds. This announcement serves as the official record of the transaction from the US perspective.

Simultaneously, the Banco Central argentino ratified the information. The dual confirmation from both the lending nation and the borrowing nation's central bank ensures the transparency and accuracy of the financial settlement. There has been no official dispute regarding the amount or the timing of the repayment.

The successful repayment of the 2.5 billion dollar loan likely stabilizes the immediate financial relationship between Argentina and the United States. By clearing this debt, the Milei administration avoids potential default risks associated with the pre-election financing. It also frees up the remaining 20 billion dollar swap capacity for potential future use, should economic conditions require it.

However, the reliance on new debt to pay off old debt indicates a continued reliance on external financing to balance the books. As the government navigates complex economic reforms, the ability to access funds from international organizations remains a key pillar of its financial strategy. The repayment is a positive signal to international markets regarding Argentina's willingness to honor its commitments.