Argentina and the IMF: A new economic chapter after a $20 billion agreement

In April 2025, Argentina reached an agreement with the International Monetary Fund (IMF) for a $20 billion loan under the Extended Fund Facility (EFF) program, set for 48 months. This pact—the 23rd in the country’s history with the IMF—marks a turning point in President Javier Milei’s economic policy, as he aims to stabilize the economy and restore investor confidence.

Key Details of the IMF Agreement

The deal includes an initial disbursement of $12 billion, with subsequent reviews scheduled to assess compliance with fiscal targets and reserve accumulation. The program supports Argentina’s transition toward a more open, market-oriented economy, focusing on maintaining strong fiscal discipline, improving exchange rate flexibility, and advancing structural reforms to boost productivity and growth.

Elimination of Currency Controls

As part of the agreement, Argentina has dismantled the currency controls that had been in place since 2019. The Argentine peso now floats within a managed band between 1,000 and 1,400 pesos per U.S. dollar, with a 1% monthly expansion. This measure aims to attract more export-related dollar inflows and facilitate financial transactions, helping to stabilize the peso and rebuild international reserves.

Market Reactions and Implications

The combination of the IMF deal and the easing of currency controls has been met with optimism by investors. Argentine bonds and stocks are expected to rally, alongside improved country risk perception and a narrowing of the exchange rate gap. Wall Street analysts anticipate that these reforms could allow Argentina to return to international capital markets by early 2026.

Tips for Traders

Given the evolving economic landscape, traders—especially those operating in Argentina—should consider the following strategies:

• Monitor the Exchange Rate: Watch the peso’s value within the new exchange band, as fluctuations can impact import/export operations.

• Assess Risk Exposure: Review investment portfolios for currency risk exposure and consider hedging strategies to mitigate potential losses.

• Stay Informed on Policy Shifts: Closely follow government policies and IMF program reviews, as they can influence market dynamics and investment opportunities.

• Diversify Investments: Explore opportunities across different sectors and asset classes to spread risk and capitalize on emerging opportunities from economic reforms.