Sept. 24 (UPI) — The U.S. Treasury is preparing a $20 billion currency swap with Argentina, Treasury Secretary Scott Bessent said Wednesday. He announced the plan after Argentine President Javier Milei met a day earlier with President Donald Trump at the United Nations General Assembly.

Bessent reiterated the United States is “ready to do whatever it takes to support Argentina and the Argentine people” in a message on X in which he also praised Milei’s leadership.

He added that the United States “is prepared” to buy Argentina’s dollar-denominated debt.

“We are also prepared to provide significant backup credit through the Exchange Stabilization Fund, and we have been in active discussions with President Milei’s team to do so,” Bessent said.

The announcement amounts to a prearranged “loan” that would give Argentina’s government dollars in exchange for pesos, with the commitment to repay the funds within a set period at an agreed interest rate. The main goal is to prevent the economic adjustment program led by Milei from failing.

The Argentine president thanked the United States for its support in a post on X, writing, “We deeply value our friendship with the United States and its commitment to strengthen our partnership on the basis of shared values. Together we will build a path of stability, prosperity and freedom. MAGA!”

Argentina is facing a fragile economic situation: Central Bank dollar reserves are running low, the peso is losing value and the risk of recession is growing.

Against that backdrop, the agreement Bessent announced is intended to give Argentina a financial reserve to pay debt, stabilize the exchange rate and reassure investors. Without that support, the government would face greater difficulties slowing the peso’s decline and containing inflation — issues at the center of Milei’s economic policy.

In addition, the World Bank said Tuesday it is “accelerating support for Argentina,” combining public financing, private investment and capital mobilization to “deploy up to $4 billion in the coming months.”

The bank said the package will target “key drivers of competitiveness,” including “unlocking mining and critical minerals; boosting tourism as a source of jobs and local development; expanding access to energy; and strengthening supply chains and financing for small and medium-sized businesses.”

The official statement in Washington said the move “builds on the $12 billion support package announced in April” and “reflects strong confidence in the government’s efforts to modernize the economy, advance structural reforms, attract private investment and create jobs.”

The World Bank added that “all proposed operations will be subject to approval by the Executive Board.”

Economy Minister Luis Caputo welcomed the announcement and thanked the World Bank for its support. He said the financial reinforcement is a sign of backing for the reforms under way. “The World Bank not only provides resources, it also gives confidence in the economic strategy we are carrying out,” Caputo said.

Also Tuesday, the Inter-American Development Bank said in a statement it is “working to significantly expand its operations in Argentina over the next 15 months” to increase support for the country.

The plan combines sovereign financing with private investment. It includes $2.9 billion in five new public-sector operations in 2025, plus $1 billion through IDB Invest directed at strategic sectors.

Following the U.S. financial support announcement, markets reacted with optimism: Argentine bonds posted sharp gains, stocks extended their recovery and the country’s risk index dropped, reflecting improved perceptions of solvency.

At the same time, the peso strengthened against the dollar, a sign that government intervention and expectations of outside assistance helped ease pressure on the exchange rate.

Taken together, the moves showed the announcement was seen as immediate relief for Argentina’s finances and a signal of greater short-term stability.