US midterm losses raise doubts over Trump's support for Milei before 2027 vote

UPI reported on 5 November that Democrats will regain control of both houses of Congress in January. The result raises questions about whether Trump can provide similar assistance again, and about Washington's continued political and financial support for Argentina as Milei prepares for a 2027 re-election bid.

A QSocial survey published by Argentine newspaper Perfil found that 61% of Argentines believe the US election results hurt Milei's re-election chances. Of those surveyed, 46% said the results significantly complicate his prospects and 15% said they have some negative impact. Another 15% said the impact would be limited, while 23% said there would be no effect.

Lucas Romero, director of Synopsis Consultores, told UPI the setback could hurt Milei in two ways: by weakening the image of political strength he drew from Trump's support, and by reducing the likelihood of further US financial assistance before 2027. "Having the support of such a battered Trump is not as positive for Milei," Romero said. He warned that Argentina could face renewed pressure on the peso before the vote, as in previous election cycles.

Trump backed Milei in the 2025 legislative elections with an assistance package that included a $20 billion currency swap agreement, UPI reported. Treasury Secretary Scott Bessent announced the $20 billion package, which involved trading US dollars for Argentine pesos, Mother Jones reported. Milei's party then won a surprisingly strong victory in the legislative elections, and Argentine dollar bonds and the peso both surged, Bloomberg reported.

The 2027 repayment test

Argentina faces more than $23 billion in foreign-currency principal repayments in 2027, or more than $32 billion including interest, according to IMF figures cited by CNBC-TV18. That is among the largest single-year burdens since 2022-23, when the IMF was also disbursing billions that Argentina used to repay the fund.

The IMF gave Argentina a pass in May after net international reserves accumulation remained below programme targets, CNBC-TV18 reported. The fund said last week it was confident of being repaid. Even so, its latest staff report warned of "exceptional risks", saying that while Argentina's debt is sustainable, there is no high probability that it will remain so.

Alejo Czerwonko, chief investment officer for Emerging Markets Americas at UBS Global Wealth Management, said Argentina's 2027 debt maturities are sizable and coincide with a general election. He said Argentina has "one of the most resourceful and creative finance teams in the world" and has worked to get ahead of the challenge through domestic-law dollar bonds, loans from international financial institutions and other financing. More official US lending cannot be ruled out, he said.

Moody's Ratings senior credit officer Jaime Reusche told CNBC-TV18 that financing flows were becoming more comfortable for the sovereign and that there was an increasing likelihood Argentina could meet all its 2027 commitments even without market access. Argentina could "muddle through" by drawing somewhat on reserves, helped by alternative financing and expected export gains, he said. An Economy Ministry spokesperson said Argentina would not face a dollar shortage next year because it has a significant trade surplus and all debt maturities are pre-financed.

IMF staff said in a May report that projects approved under Argentina's large-investment incentive programs exceeded $25 billion, mainly in energy, mining, infrastructure and agribusiness. Much of that payoff remains ahead, leaving 2027 as a bridge between Milei's early stabilisation efforts and a future increase in dollar inflows.

Peso pressure

Market stress, which last year helped trigger an emergency US support package, has eased substantially in recent months. Argentina's country risk premium, the extra return investors demand to hold its debt over US Treasuries, narrowed to as low as 420 basis points, its lowest in eight years, CNBC-TV18 reported. On 26 October 2026 it rose above 760 points, Rio Times reported, after Brazil's election set off a regional sell-off.

Economy Minister Luis Caputo again ruled out a peso devaluation this week, telling the Argentine Industrial Union that the exchange rate matters little for manufacturers' costs, Rio Times reported. The wholesale peso closed at ARS1,541 per US dollar on 26 October 2026, a record low, the outlet said. The wholesale dollar trades near 1,550 per dollar and the band ceiling was about 1,956 on 4 November. No change to the exchange-rate band was announced.

Romero said: "The question we're asking ourselves in Argentina is whether Trump will still be in a position to do that next year." Hugo Haime, another political analyst, told UPI that current polls show a statistical tie between Milei's governing party and the Peronist opposition, which has yet to select its candidate for the 2027 presidential election.

Argentina still lacks the reserve buffers that would make an election-year repayment look routine, CNBC-TV18 reported. Its financing plan depends as much on confidence as on cash, and a weaker mandate or policy reversal could revive the election-year rush into dollars.

Argentine debt remains firmly rated deep in junk territory even after recent sovereign credit rating upgrades from S&P Global and Fitch, CNBC-TV18 reported. Moody's, which upgraded Argentina a year ago and gave it a stable outlook, has become more optimistic about the country's ability to get through the 2027 payments.