* Official Argentine peso posts record closing low versus dollar * US Treasury has not issued a statement about swap line * Argentine central bank says deal will enable it to respond to volatility (Adds peso record low in paragraph 4) By Sarah Morland Oct 20 (Reuters) – Argentina's central bank said on Monday it signed a $20 billion exchange rate stabilization agreement with the U.S. Treasury Department, six days ahead of a key midterm election. The central bank's statement said the agreement sets forth terms for bilateral currency swap operations between the U.S. and Argentina, but it provided no technical details. The central bank, the BCRA, said: "Such operations will allow the BCRA to expand its set of monetary and exchange rate policy instruments, including the liquidity of its international reserves." The Argentine peso closed at a record low, down 1.7% on the day to end at 1,475 per dollar. The BCRA said the pact was part of a comprehensive strategy to enhance its ability to respond to foreign exchange and capital markets volatility. The U.S. Treasury did not immediately respond to a request for details on the new swap line and has not issued its own statement about the arrangement. U.S. Treasury Secretary Scott Bessent said last week that the arrangement would be backed by International Monetary Fund Special Drawing Rights held in the Treasury's Exchange Stabilization Fund that will be converted to dollars. Bessent has said that the U.S. would not put additional conditions on Argentina beyond President Javier Milei's government continuing to pursue its fiscal austerity and economic reform programs to foster more private-sector growth. He has announced several U.S. purchases of pesos in recent weeks, but has declined to disclose details. ELECTION THIS WEEKEND Argentine Economy Minister Luis Caputo said last week he hoped the swap deal framework would be finalized before the October 26 midterm parliamentary vote, in which Milei's party will seek to grow its minority presence in the legislature. Milei, who has sought to solve Argentina's economic woes through fiscal spending cuts and dramatically shrinking the size of government, has been handed a string of recent political defeats. U.S. President Donald Trump said last week the U.S. would not "waste our time" with Argentina if Milei's party loses in the midterm vote. The comment briefly shocked local markets until Bessent clarified that continued U.S. support depended on "good policies," not necessarily the vote result. He added that a positive result for Milei's party would help block any policy repeal efforts. (Reporting by Sarah Morland and Brendan O'Boyle; Editing by Alexander Villegas, Cynthia Osterman and Rosalba O'Brien)
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