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Argentina Ends Key Currency Controls in Landmark IMF Deal
$20 Billion Agreement with the IMF
Argentina has finalized a $20 billion, 48-month Extended Fund Facility agreement with the International Monetary Fund (IMF). The deal includes an immediate disbursement of $12 billion, with a first program review scheduled for June. If that review is successful, an additional $2 billion will be disbursed.
Peso Allowed to Float Within a New Exchange Band
The Central Bank of Argentina announced that it will lift the fixed exchange rate peg beginning Monday. The peso will be allowed to float within a moving band ranging from 1,000 to 1,400 pesos per U.S. dollar. On Friday, the currency closed at 1,074 pesos to the dollar.
Major Capital Controls to Be Dismantled
Argentina will remove significant components of the capital control system known locally as the “cepo.” These restrictions have been in place since 2019 and have limited access to foreign currency for individuals and businesses.
Profit Repatriation for Companies Restored
Starting this year, companies operating in Argentina will be able to repatriate profits abroad. This change responds to long-standing demands from the private sector and could help stimulate foreign investment.
Government Statement on Economic Normalization
At a press conference, Economy Minister Luis Caputo stated, “As of Monday, we will be able to put an end to the foreign exchange restrictions which were imposed in 2019 and which limit the normal functioning of the economy.”
Broader Economic Context
The policy changes come as Argentina continues to grapple with longstanding economic challenges, including high inflation, currency instability, and limited foreign reserves. The removal of restrictions and alignment with IMF policies mark a significant shift in economic strategy aimed at stabilization and attracting investment.
“Argentina Ends Key Currency Controls in Landmark IMF Deal” “Argentina Ends Key Currency Controls in Landmark IMF Deal”