The Wall Street Journal reported on Thursday, citing sources, that financiers had canceled a proposed $20 billion rescue for Argentina from JPMorgan Chase, Bank of America, and Citigroup in favor of a smaller, short term credit package.
The U.S. Treasury and Argentina came to a $20 billion exchange rate stability deal in October, which will be combined with a $20 billion bank led financing facility. Days before a crucial midterm election for Argentina's libertarian president, Javier Milei, the agreement was reached.
According to bankers, the debt facility is no longer being seriously considered, the Wall Street Journal said, citing people with knowledge of the situation. Rather, it stated that lenders want to lend Argentina about $5 billion under a short term repurchase, or "repo," facility.
JPMorgan, Citi, and Bank of America all declined to comment. Earlier this month, Jamie Dimon, CEO of JPMorgan, told Reuters that while a possible bank loan to Argentina "may not be necessary," the lender may be willing to provide the country with special funding. A request for comment was not immediately answered by Argentina's minister of economics.
The money would go toward an approximately $4 billion debt payment that is due in January, according to the Wall Street Journal, which also noted that negotiations were still in the early stages and could change or fail.
Treasury Secretary Scott Bessent and U.S. President Donald Trump have been ardent supporters of Milei. Although Milei's administration has gradually reduced inflation from triple digit year over year increases, the government was rapidly depleting dollars prior to the U.S. assistance, and reserves are tight.
