An IMF source told Reuters on Monday that a technical mission from the International Monetary Fund (IMF) would arrive in Buenos Aires on Tuesday for the first review of a $20 billion funding arrangement.
The review is of a four-year Extended Fund Facility (EFF) deal, freed up in April to aid Argentina’s efforts to stabilize the economy.
The team will be headed by IMF economist Bikas Joshi, and the mission’s findings and next steps will be made available in the coming weeks.
This milestone is the first step in the implementation of the economic reforms agreed with the Fund under the EFF deal since the arrival of the mission.
Key reforms under review
Argentina signed the EFF agreement in April after taking major steps to realign its macroeconomic policy.
The elimination of essential components of the country’s long-standing currency controls was at the heart of these efforts.
Before the accord, the government moved to loosen its grip on the peso and adopt a more flexible foreign exchange system.
The IMF was planning to make a $12 billion payout as part of the program in April, with a further $2 billion available in June.
These funds are meant to help stabilise Argentina’s economy, restore confidence, and meet foreign funding demands.
The IMF has claimed that the deal aims to “catalyse additional official multilateral and bilateral support, as well as timely re-access to international capital markets.”
The program’s core goals include maintaining a strong budgetary anchor and transitioning to a more flexible exchange rate regime.
Peso under pressure despite policy shift
One of the programme’s main targets is the accumulation of $4 billion in net foreign reserves by end-2025 compared to end-2024, is one of the main targets of the programme.
However, the peso has been under renewed pressure, making it harder for the government to achieve that aim.
The Argentine central bank said it was lifting a fixed currency peg, starting Monday, as part of the wider reforms.
The peso, having a flexible exchange rate, will instead be subject to a moving band of 1,000 to 1,400 per US dollar.
The currency ended at 1,074 per dollar on Friday.
This new regime is designed to give more flexibility as well as reduce distortion in the foreign exchange market.
The central bank also announced it would end key elements of the so-called Cepo, a series of capital controls that over the years limited access to dollars.
That is a firm departure from the monetary stranglehold of the previous administrations.
A crucial test of the government’s economic strategy
The IMF visit comes at a critical time for Argentina.
While foreign markets and multilateral organisations applauded the first steps toward reform, the government continues to face major macroeconomic issues such as high inflation, fiscal imbalances, and low investor confidence.
The conclusion of this week’s technical evaluation will be critical in determining the next phase of IMF disbursements and the pace of Argentina’s economic recovery.
It will also provide a clearer view of how the government’s changes are translating into concrete achievements on the ground, particularly in terms of recovering foreign reserves and stabilising the peso.
The post IMF team heads to Buenos Aires for $20B program review amid currency pressure appeared first on Invezz
