US withdrew nearly $900mln from IMF as Argentina faced debt payment

By Al Mayadeen English
Source: Financial Times
Today 14:07

The move comes amid a broader US-backed financial lifeline to Argentina and raises questions about transparency and the strategic risk of the transaction.

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United States Secretary of the Treasury Scott Bessent, left, presents an award to the President of Argentina, Javier Milei, right, at the Global Citizen Awards ceremony, September 24, 2025, in New York (AP)

The International Monetary Fund’s (IMF) data show that the United States’ SDR (Special Drawing Rights) holdings fell by approximately US$870 million, while Argentina’s SDR account rose by a closely matching amount, the Financial Times (FT) reported.

This shift occurred just ahead of Argentina’s scheduled debt servicing to the IMF; about US$840 million due on November 1, 2025.

While neither the US Treasury, Argentina’s Economy Ministry, Argentina’s Central Bank, nor the IMF itself confirmed the exact mechanics of the transaction, analysts believe the timing suggests that Washington enabled Buenos Aires to meet its IMF obligation via SDR‑based moves.

Strategic context: A US lifeline to Argentina

This SDR movement is part of a broader US initiative to stabilize Argentina’s economy and government under President Javier Milei’s administration. Earlier this year, the US offered a $20 billion currency‑swap line and other dollar‑liquidity support to Argentina to prevent deeper economic collapse, and influence the results of mid-term elections, hoping to aid Milei's presidency.

Buenos Aires’ reserves remain severely depleted even after receiving a large tranche of its most recent IMF bailout, estimated to be around $15 billion of a $20 billion. While the US intervention has calmed markets, it increases Argentina’s debt burden and raises questions about the US’ ability to recover funds or the possibility of prioritizing US support over private creditors in a future restructuring.

Risk, transparency, implications

Experts describe the US‑Argentina SDR transaction as “a huge, risky undertaking."

Mark Sobel, a former US Treasury official who is now the US chair of the OMFIF think-tank, told FT, “At the moment, we know very little about it.”

It would be “extremely unusual for the US to sell its SDRs to another country,” Sobel added.

It remains unclear whether the US simply transferred its SDRs to Argentina or if an exchange took place under the swap arrangement. If Argentina fails to meet future obligations, the US may be exposed; the IMF itself lists repayment risks starting in 2026, given overlapping obligations between the fund and Argentina’s private‑creditor debts.

In the US, agricultural producers such as soybean farmers have criticized the move, arguing that taxpayer‑funded support to Argentina, itself a major grain exporter, undermines US competitiveness as China’s demand for US soybeans weakened following Trump tariffs.

Geopolitical, economic stakes

From an Argentina‑Latin America vantage, the US is using financial diplomacy to maintain influence in the region, bolster a market‑oriented government aligned with Washington, and prevent Argentina from shifting toward alternative economic entities or blocs, namely China and the BRICS+. The support helps shore up Buenos Aires’ ability to service its debts and hold off speculative attacks on the peso, but at the cost of greater economic vulnerability.

For the IMF and global bailout regime, the transaction shows how powerful member states can leverage SDRs and swap lines in ways that may blur the distinction between creditor‑nations and debtor‑nations.

Argentina now enters a critical phase. With reserves still fragile and upcoming obligations mounting, the recent SDR movement may buy time, but it does not remove the fundamental structural risk. Analysts suggest that Argentina may require even further assistance, either from the IMF or other international actors, to avoid a broader sovereign distress event.

For the US, the question remains whether this strategic bet will pay off, both in terms of financial returns and geopolitical leverage, or whether it will become another costly bailout for Washington.