The result came after Milei’s party suffered a landslide defeat to the Peronist opposition in a September local vote in the Buenos Aires province, a result that sparked a selloff of the peso amid investor fears over the president’s standing with voters. The slide led the Trump administration to extend a financial lifeline to Argentina in an effort to help both the currency and the government.
Markets will likely rally Monday as election uncertainty fades and Milei’s party, which currently holds only about 15% of seats, begins turning its attention to the key economic reforms the president has outlined, including tax cuts, looser labour protections and a pension overhaul. Argentina bonds, which gained the most in emerging markets last year, had also been throttled amid the September election loss and the US support package.The peso in the crypto market extended gains after authorities confirmed a strong result for Milei, strengthening to around 1,390 pesos per dollar, according to crypto exchange Lemon.
The result was “a very strong and conclusive performance by Milei’s LLA party,” said Alberto Ramos, managing director and head of Latin America macroeconomic research at Goldman Sachs Group Inc. “This should give his administration a fresh endowment of legitimacy and political capital which, if well used should strengthen governability. That also bodes well for the continuation of strong US financial support.”
The main bloc of the Peronist party had only 24.5% of the votes on Sunday, a much lower level than it garnered in the election last month. Even combined with its local iterations, the Peronist party had about 32% of the vote, according to a vote tally by the Clarin newspaper. Fuerza Patria was on the ballot in only 14 of the 24 provinces.US Support
Milei’s win will also vindicate the extraordinary support US Treasury Secretary Scott Bessent offered Argentina. Just before the election, the US signed a $20 billion currency swap line agreement with Argentina to shore up the beleaguered peso, which is down more than 30% so far this year.
The US also directly purchased pesos in the run-up to the vote, and is coordinating additional financial support from Wall Street banks for Milei’s administration. President Donald Trump met Milei at the White House two weeks ago, and the Argentine has emerged as one of the US leader’s most ardent supporters abroad.
The backing from Washington came on top of Argentina’s $20 billion program with the International Monetary Fund that began in April.
A victory could also help turn the page politically for Milei. The president and his party have faced three corruption scandals this year, while Argentina’s slowing economy and frustration with high unemployment rates helped push Milei’s approval to the lowest level of his term ahead of the vote.
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