Warren Calls on Treasury to End Argentina's $20B Swap Line

U.S. Senator Elizabeth Warren is urging Treasury Secretary Scott Bessent to terminate a $20 billion currency swap line established with Argentina last year. As the leading Democrat on the Senate Banking Committee, Warren argues the financial backstop was a temporary measure that has now served its purpose.

In a letter sent Wednesday, Warren reminded Bessent that the Treasury had framed the agreement as a tool for "acute, short-term and urgent" economic needs. The original goal was to provide a bridge for Argentine President Javier Milei's government through critical October elections while it pursued economic reforms.

A Short-Term Fix or an Open-Ended Agreement?

Warren’s main concern is that the swap facility remains active, creating the possibility of continued use well beyond its initial scope.

"Despite Treasury's assertion that its use of the (Exchange Stabilization Fund) was for an 'acute, short-term and urgent' purpose, it appears—by leaving the (exchange stabilization arrangement) in place—to have left open the possibility of continued use of the ESF in Argentina well after the October 2025 elections," Warren wrote.

She contends that keeping the arrangement open contradicts the Treasury's original assurances to Congress.

How the Currency Swap Propped Up Argentina's Economy

The Treasury Department signed the currency swap agreement with Argentina just before a key midterm election, as concerns mounted over the country's economic stability.

The facility provided Argentina's central bank with crucial funds to support the value of the peso and stave off a potential devaluation ahead of the vote. The funds were deployed in October for two primary purposes:

• Repaying debt to the International Monetary Fund (IMF).

• Replenishing foreign currency reserves used to defend the peso's exchange rate.

The election ultimately saw President Javier Milei, a close ally of U.S. President Donald Trump, succeed in expanding his influence within the country's legislatures.

Treasury Faces Questions Over Swap Facility's Status

Warren noted that Secretary Bessent had previously told the committee that Argentina had already repaid its limited draw on the facility in full. She also mentioned that the Exchange Stabilization Fund (ESF) no longer holds any Argentine pesos.

However, there has been no official confirmation that the swap line itself is closed. Warren has requested written confirmation of its termination by February 12.

Bessent is scheduled to testify before the Senate Banking Committee on Thursday. Officials from Argentina's foreign and economy ministries did not provide an immediate response when asked for comment.