BUENOS AIRES, Argentina — Argentine markets experienced a significant rally on Monday, with the peso surging and sovereign bonds jumping following libertarian President Javier Milei’s decisive victory in midterm congressional elections. This outcome has been interpreted as a strong mandate for Milei to advance his radical free-market reforms, which have garnered both domestic and international attention. The Argentine peso, which had been in a state of chronic depreciation, soared by over 10%, trading at more than 1,300 per dollar. This marked a stark reversal from the previous week, when investors and depositors were offloading the currency in anticipation of a potential Milei defeat. The market rebound signals renewed investor confidence in Argentina’s economic trajectory, particularly in light of the Trump administration’s strategic support for Milei’s government. U.S. President Donald Trump, speaking aboard Air Force One, emphasized the $40 billion in promised U.S. aid aimed at helping Argentina avert a currency crisis. Trump framed Milei’s efforts as a battle against decades of flawed economic policies, crediting U.S. support for enabling this transformation. The midterm elections, which typically attract limited global interest, became a focal point for Washington and Wall Street due to the high stakes involved. Trump had previously threatened to withdraw financial support if Milei’s party lost to the left-leaning opposition. Over the past month, Argentine markets had been under strain amid a severe cash crunch and fears that the public was growing weary of Milei’s austerity measures. The left-leaning Peronist coalition’s strong performance in local elections had exacerbated these concerns, leading to a record low for the peso at nearly 1,500 against the dollar. However, Milei’s La Libertad Avanza party secured a decisive victory on Sunday, winning 41% of the national vote in the lower house compared to the Peronists’ 32%. This outcome prompted a surge in Argentina’s dollar-denominated bonds, with those set to mature in 2035 jumping over 10 cents. Despite the market optimism, Trump’s $40 billion rescue package for Argentina has faced mounting political backlash in the U.S. Democrats have criticized the aid as a misuse of resources, particularly during a government shutdown that has left federal workers unpaid. American ranchers and farmers have also voiced discontent, citing concerns over Argentine beef and soybean exports undercutting U.S. producers. Even some of Trump’s core supporters have questioned the move, viewing it as inconsistent with his “America First” agenda. Nonetheless, Trump and U.S. Treasury Secretary Scott Bessent have defended the aid, emphasizing the strategic importance of Argentina’s economic stability. On Monday, Trump highlighted the financial benefits of Milei’s victory for American investors, noting the rise in bond prices and debt ratings as evidence of the election’s positive impact on U.S. interests.
Big win in midterm vote for Argentina’s President Milei boosts markets and vindicates Trump
