The recent agreement between Argentina and the International Monetary Fund (IMF) marks a turning point in the country’s economic policy. With a 20,000 million USD financing program, the Government of Javier Milei undertakes to implement a more flexible exchange scheme, based on the administered dollar flotation.
This new approach seeks to stabilize the economy, reduce the exchange gap and accumulate reservations, while facing the challenges of persistent inflation and a global economic crisis. The IMF directory could approve the program on Friday, which would allow a significant initial disbursement in Argentina.
According to estimates, this first turn could range between USD 12,000 and USD 15,000 million, although not all the amount would be immediately available to the Central Bank. The release of these funds will depend on the evolution of the exchange scheme and the fulfillment of the reserves accumulation goals.
This initial disbursement is crucial to relieve tensions in the exchange market and strengthen the position of the central bank in a context of high volatility. The new exchange scheme moves away from the “Crawling Peg” system that had been in force, characterized by daily 1% monthly minide.
This model will be replaced by a system of administered interventions, coordinated with the IMF, to avoid abrupt devaluation that could accelerate inflation before the elections. Although it has not yet been defined whether explicit flotation bands will be established or if it will be a more discretionary system, the objective is to move towards a gradual unification of the exchange rate.
One of the key points of the agreement is the elimination of the Blend dollar, a tool that allowed exporters to liquidate 20% of their currencies in the financial market to a higher exchange rate than the officer. Although this measure helped reduce the exchange gap, it implied a loss of income for the estimated central bank in USD 15,000 million.
Scheme
Within the framework of the new scheme, a gradual criterion will be applied to lift the exchange rate, differentiating between the current flows of dollars and the accumulated stocks. He government It discards an abrupt devaluation of the official exchange rate, as this could have a negative impact on internal prices and inflation.
On the other hand, it is committed to an orderly transition towards a more flexible exchange market, which allows greater stability and predictability. The definitive unification of the exchange rate is planned for after the October elections, which reflects the importance of this process in the political and economic context of the country.
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