WASHINGTON, Feb 5 (Reuters) – U.S. Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, asked Treasury Secretary Scott Bessent to terminate a $20 billion currency swap line with Argentina that the Treasury Department provided last year to stabilize the country’s economy.
In a letter on Wednesday, Warren reminded Bessent that the Treasury Department had assured Congress that the currency swap lines were intended to meet “urgent, short-term and urgent” needs as a bridge to help Argentina’s President Javier Milley get through a crucial October election and continue his economic reforms.
“Despite Treasury’s claims that the use of the (Exchange Stabilization Fund) is for ’emergency, short-term and urgent’ purposes, by retaining the (Exchange Stabilization Arrangement), it appears likely that Argentina will continue to use the ESF long after the October 2025 election,” Warren wrote in the letter.
The Treasury Department signed the agreement with Argentina shortly before crucial midterm elections amid concerns that the country’s economy was in trouble. The swap line provides Argentina’s central bank with funds it can use to help support the value of the peso and prevent devaluation ahead of the vote.
The funds were used in October to repay debt to the International Monetary Fund and return foreign currency used to support the exchange rate in the days leading up to the election.
Milley is a close ally of U.S. President Donald Trump and has successfully expanded his influence in the U.S. legislative body.
Warren said Bessant told the committee last month that Argentina had quickly and fully repaid limited withdrawals from the swap arrangement and that the Exchange Stabilization Fund held no pesos, but did not confirm that the fund was now closed. She gave Bessent until February 12 to provide written confirmation.
Bessant will testify before the Senate Banking Committee on Thursday.
(Reporting by Andrea Shalal; Editing by Franklin Paul)