Argentina has repaid the funds it drew from a $20 billion US credit line, marking a key milestone for President Javier Milei’s effort to stabilize one of the world’s most crisis-prone economies and restore international investor confidence.

The announcement was made Friday by US Treasury Secretary Scott Bessent, who said Milei’s libertarian government had “quickly and fully repaid its limited draw” from the facility, without disclosing the exact amount returned.

Treasury data released earlier showed that Argentina’s central bank had swapped about $2.5 billion worth of pesos for dollars through the credit line by the end of October. The Argentine Central Bank later confirmed that the repayment had been completed.

The credit facility, provided through the US Exchange Stabilization Fund, was arranged last year as markets in Buenos Aires came under heavy pressure ahead of Argentina’s midterm elections. The support helped prevent a collapse in the peso and calmed fears that the government could default again.

Political and financial boost for Milei

The loan proved politically decisive. Milei’s party went on to score a strong victory in the midterm elections, easing concerns that voter backlash could derail his aggressive austerity and reform programme.

Since then, investor sentiment has improved sharply. In another sign of renewed confidence, Argentina returned to international capital markets last month by issuing its first US-dollar bond in eight years, a step that would have been unthinkable during previous bouts of financial instability.

Bessent said the repayment meant the US Treasury now holds no Argentine pesos from the transaction, arguing that the deal delivered both financial and strategic benefits.

“Stabilizing a strong American ally – and making tens of millions in profit for Americans – is an America First homerun deal,” he said. “A strong and stable Argentina that helps anchor a prosperous Western Hemisphere is in our clear best interest.”

What is a Credit Line?

A credit line is a financial backstop that allows a government to temporarily borrow foreign currency when reserves are under pressure, much like an overdraft for a country’s central bank. In Argentina’s case, the US facility provided access to dollars at a critical moment, helping to stabilize markets and shore up confidence ahead of the country’s midterm elections.

Praise from Buenos Aires, but risks remain

Argentina’s Economy Minister Luis Caputo welcomed the repayment and thanked Washington for its backing.

“It is an excellent reality for our country to have been able to build this geopolitical alliance and to know that we have the explicit support of the most important country in the world,” Caputo said.

Despite the milestone, Argentina’s economic position remains fragile. Foreign-exchange reserves are still dangerously low, and the government faces heavy repayment obligations in the coming months on loans from the International Monetary Fund and private creditors.

Analysts also continue to question the structure of the US loan, which was criticised for being opaque and largely unconditional, exposing US taxpayers to risk if Argentina’s reforms falter.

For now, however, the repayment marks a rare positive chapter in Argentina’s turbulent financial history, giving Milei a valuable boost as he pushes to re-anchor the country in global markets.