Argentina and the International Monetary Fund sign an agreement and lift foreign exchange controls.

According to Reuters, Argentina and the International Monetary Fund (IMF) have signed an extended credit arrangement worth $2 billion with a duration of 48 months. As an important political move before signing the agreement, Argentina has lifted the main components of its foreign exchange control system and significantly relaxed controls on its national currency, the peso.

The IMF will provide Argentina with the first loan of $1.2 billion on April 15 (Tuesday), and another $200 million will be available in June.

It is expected that this agreement will help Argentina "attract more official support, including multilateral and bilateral support, and enable it to quickly return to the international capital market."

The IMF also stated: "The main principles of this plan include maintaining a solid fiscal pillar and transitioning to a more reliable monetary credit and foreign exchange system, making the exchange rate more flexible."

Previously, the Central Bank of Argentina announced that from April 14, it would abolish the fixed exchange rate system and allow the peso to fluctuate within a free-floating range, with an exchange rate range of 1 USD to 1000 to 1400 pesos, while the closing exchange rate on Friday, April 11 was 1 USD to 1074 pesos.

The Argentine government will abolish most of the so-called "cepo" - the capital flow control system that once restricted access to foreign exchange. In addition, starting this year, companies will be able to repatriate their profits, which is a significant demand from the business sector and may stimulate investment.

Argentine Economy Minister Luis Caputo said at a press conference: "Starting Monday, we will be able to lift foreign exchange restrictions implemented in 2019, which once hindered the normal operation of the economy."

President Javier Milei of Argentina said in a televised speech that Argentina "is better equipped than ever to deal with external shocks."

Original source: https://www.toutiao.com/article/1829374130590980/

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