Argentina seals US$20 billion IMF deal, tears down currency controls in major policy shift
The IMF will first disburse US$12 billion, with another US$2 billion by June, as Argentina’s central bank set to undo fixed currency peg
Argentina sealed a US$20 billion, 48-month extended fund facility deal with the International Monetary Fund (IMF) on Friday and, in a major policy move ahead of the deal, dismantled key parts of its years-long currency controls and loosened its grip on the peso.
The IMF will disburse US$12 billion by next Tuesday, while another US$2 billion will become available by June.
The deal was expected to help Argentina “catalyse additional official multilateral and bilateral support, and a timely re-access to international capital markets”, the IMF said.
“Key pillars of the programme include maintaining a strong fiscal anchor, transitioning towards a more robust monetary and FX regime, with greater exchange rate flexibility,” it added in a statement.
Earlier, the South American nation’s central bank announced it would undo a fixed currency peg from Monday, letting the peso freely fluctuate within a moving band between 1,000 pesos and 1,400 pesos per dollar, versus 1,074 at the close on Friday.
Argentina would eliminate major parts of the so-called cepo capital controls that had restricted access to foreign currency, the central bank said in a statement.