Bessent's Statements on Exchange Stabilization Fund and Japan
Treasury official Bessent stated that no loan was extended to Japan, Exchange Stabilization Fund assets were used, and the US has no debt risk.
In his response to Senator Elizabeth Warren's letter, Bessent explained that no credit line was opened for Japan and that Exchange Stabilization Fund assets were utilized.
Exchange Stabilization Fund Resources Were Used
Bessent stated that no new resources were requested from Congress and that fund assets were swapped for yen. No credit of any kind was extended to Japan.
Japan Has No Debt
Expressing that Japan has no debt to the US Treasury, the official emphasized that therefore, there is no situation such as a repayment risk.
Global Markets and Risks
It was conveyed that irregular movements in the yen markets could pose a risk to the global financial system and increase borrowing costs.
The Argentina Example Was Given
It was recalled that a similar approach applied to Argentina as well and that the Exchange Stabilization Fund was used to prevent regional crises.
Coordinated Interventions
It was stated that the US and Japan carried out coordinated interventions in the yen market at the beginning of August and that new steps could be taken if necessary.