US Treasury Secretary Scott Bessent has said the US is “ready to do what is needed” to help stabilise Argentina’s escalating financial turmoil.

“All options for stabilization are on the table,” Bessent wrote on social media, calling Argentina a “systematically important US ally in Latin America”.

The message helped to calm financial markets, which have been rattled as recent election losses raise doubts about the future of Javier Milei’s cost-cutting, free-market agenda.

The value of the peso has been plunging, while investors dump Argentine stocks and bonds.

Milei, a libertarian economist and ally of US President Donald Trump, was elected president of Argentina in 2023 as an outsider candidate who promised to control soaring inflation through radical government spending cuts and other reforms.

A stable Argentine peso is critical to that pledge.

But the currency has lost value as investors move money out of the country, in part worried about the government’s ability to keep the peso steady.

In recent weeks, the Argentine central bank has stepped in to try to stave off further weakness in the peso.

But that effort, which included spending $1.1bn (£810m) of its reserves last week to buy pesos, also depleted its holdings, putting the country in a more precarious position when it comes to paying back its debt.

Bessent said the US government was considering intervening in Argentina’s current fiscal turmoil with purchases of Argentine pesos and dollar-denominated government debt among other forms of support.

More details will be announced after President Donald Trump meets with Milei in New York on Tuesday, he added.

“We remain confident that [President Milei’s] support for fiscal discipline and pro-growth reforms are necessary to break Argentina’s long history of decline,” he wrote.

Milei expressed “enormous gratitude” for the US’s pledge of support, which helped lift Argentine stocks and prices for the country’s dollar-denominated debt in financial markets.

“Those of us who defend the ideas of freedom must work together for the welfare of our peoples,” he wrote on social media.

Milei was the first foreign leader to meet with Trump after his victory in the November 2024 US presidential election and his economic policies have won him admiration among many conservatives in the US, including Elon Musk.

But he has been on the defensive at home, especially in recent weeks, as his government has been grappling with losses in recent local elections and a bribery scandal involving his sister, who is accused of taking kickbacks from drug companies seeking government contracts.

Argentina will host national mid-term elections in October, which are expected to serve as a referendum on his controversial policies, which include cuts to social programmes such as subsidies for transportation.

In April, Bessent also provided key backing to help Argentina secure a new $20bn four-year loan from the the International Monetary Fund.