Argentina’s President Bets on Trump-Netanyahu Alliance as $9.5 Billion Debt Payment Looms

Argentine President Javier Milei travels to New York this week for crucial meetings with Donald Trump and Benjamin Netanyahu, as his government confronts mounting financial pressures following a significant electoral setback.

The meetings occur as Argentina faces $9.5 billion in debt payments through 2026, starting with $4 billion due in January. The central bank has sold $1.1 billion in reserves over three trading sessions to support the peso, which reached 1,474 per dollar.

Milei confirmed his administration is in advanced negotiations with the US Treasury for financial assistance through the Exchange Stabilization Fund. This emergency mechanism was last used in 1995 when the United States provided Mexico with $20 billion during its peso crisis.

The diplomatic push follows Milei’s La Libertad Avanza party receiving 33.8% of votes in Buenos Aires province elections on September 7, compared to 47% for the Peronist opposition. This 13-point margin in Argentina’s most populous province triggered immediate market reactions.

The peso declined 5%, the main stock index dropped 10.5%, and country risk exceeded 1,400 basis points after the election. Argentina’s stock market has become among the world’s worst performers this year, falling approximately 50% in dollar terms.

Argentina’s President Bets on Trump-Netanyahu Alliance as $9.5 Billion Debt Payment Looms

Despite electoral setbacks, the government’s economic program has delivered impressive results. Monthly inflation plummeted from peaks of 25% to 1.5% by May 2025. Most significantly, poverty fell dramatically from 52.9% in early 2024 to 31.2% in the second quarter of 2025, with 1.7 million children lifted out of poverty.

Unemployment peaked at 7.9% in the first quarter before declining to 7.6%. The economy achieved its first budget surplus in over a decade after Milei reduced public sector employment by 30,000 positions.

Milei’s meeting with Netanyahu reflects Argentina’s foreign policy realignment, including plans to relocate the embassy from Tel Aviv to Jerusalem in 2026. Argentina has aligned its UN voting with US and Israeli positions.

The October 26 congressional elections will test public support for Milei’s policies as Argentina seeks international backing to complete its economic transformation.

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