peso

 

Argentina Eases FX Controls With $15 Billion From IMF This Year

By Kevin Simauchi and Manuela Tobias

11. April 2025 at 23:09 MESZ

Updated on 

11. April 2025 at 23:38 MESZ

Takeaways NEW

• Argentina has eliminated most currency controls, allowing the peso to float within established bands, after securing a large disbursement from the International Monetary Fund this year.

  Summary by Bloomberg AI

• The country's central bank will let the peso trade within a range of 1,000 pesos to 1,400 pesos per dollar, and will end the $200 cap for individuals to purchase dollars.

  Summary by Bloomberg AI

• The move comes ahead of a new $20 billion deal with the IMF for the next four years, which will help boost central bank reserves and support Argentina's economic recovery.

  Summary by Bloomberg AI

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Argentina eliminated most currency controls and allowed the peso to float within established bands as President Javier Milei’s government said it secured a large disbursement from the International Monetary Fund this year.

The nation’s central bank said late on Friday it would let the peso trade within a range of 1,000 pesos to 1,400 pesos per dollar, effectively ending the crawling peg currently in place. That may still require the bank to sell dollars from its reserves, which will be boosted by a $15 billion disbursement of IMF funds this year — or 75% of the total program approved by the Washington-based lender.

Officials also said they were ending the $200 cap for individuals to purchase dollars while letting companies send some dividends abroad.

The move comes hours before the IMF is expected to announce a new $20 billion deal with the South American nation for the next four years. Economy Minister Luis Caputo said the funds will immediately boost central bank reserves.

Officially, Argentina plans to use IMF funding to pay down debts the country’s Treasury owes to the central bank as well as principal maturities the government must repay to the IMF over the next four years from its previous program that began in 2022, according to a decree published March 10.

More IMF money stands to help Argentina’s economic recovery after contracting for two straight years. Analysts project 2025 economic growth of 5% to go with annual inflation of 27.5% after nearly hitting 300% in Milei’s first year in office, according to the central bank’s most recent survey of economists.

Investors have grown antsy as questions swirled around whether an IMF deal would force Milei to devalue the currency for a second time since taking office. In the run-up to the deal, traders wagered that the peso in official markets would fall some 10% against the dollar by the end of the April, a rate that goes beyond the 1% per month pace at which authorities let the currency weaken.

Officials had controlled the rate of the peso’s slide, letting it weaken at a rate of 1% per month, significantly less than inflation. Many have called the policy unsustainable, warning that it made Argentine businesses less competitive in trade and pushed up costs for tourists. On the parallel markets that locals use to skirt currency controls, the peso last traded at 1341 per dollar, according to pricing data compiled by Bloomberg