The administration of United States President Donald Trump has purchased Argentinian pesos and finalised a $20bn currency swap framework with Argentina’s central bank in a deal aimed at shoring up the country’s faltering finances.

Treasury Secretary Scott Bessent announced the deal on X on Thursday, saying, “Argentina faces a moment of acute illiquidity. The international community – including [the International Monetary Fund] – is unified behind Argentina and its prudent fiscal strategy, but only the United States can act swiftly. And act we will.”

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Bessent’s comments come after four days of meetings with his Argentinian counterpart, Luis Caputo, who expressed his “deepest gratitude” to Bessent on X after the deal was announced.

The support comes as Argentina’s right-wing President Javier Milei, a close ally of Trump, has been struggling with financial market turbulence.

Argentinian bond prices plunged sharply at the end of September, as investors watched the country’s central bank rapidly burn through its scant foreign currency reserves to defend the falling peso.

In early October, the currency fell by more than 6 percent – its biggest drop within a single day since September 8, forcing the government to sell yet more dollars in the spot market to shore it back up.

While Trump’s administration has insisted this programme is not a bailout, US farmers and Democratic lawmakers have criticised the deal as just that, saying it’s helping a country that has benefitted from sales of soya beans to China, to the detriment of US farmers.

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After the announcement on Thursday, a group of Democratic senators introduced the No Argentina Bailout Act, which would stop the Treasury Department from using its Exchange Stabilization Fund to assist Argentina.

“It is inexplicable that President Trump is propping up a foreign government, while he shuts down our own,” Democratic Senator Elizabeth Warren said in a statement. “Trump promised ‘America First,’ but he’s putting himself and his billionaire buddies first and sticking Americans with the bill.”

Formerly a maverick outsider, Milei secured a surprise election win in 2023 by promising to tame runaway inflation and promote stability. Trump – a libertarian ally – has previously described Milei as his “favourite president”.

US financial support has “bought some time for Milei. It’s a lifeline, but not a panacea,” Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, told Al Jazeera in early October.  He added that, in the near-term, “inflation risks are on the upside … if Milei performs badly in October, the negative political and financial noise would rush back”.

“That would be a grim scenario for Milei,” said Abadia.

Argentina is scheduled to hold midterm elections on October 26.