The International Monetary Fund's (IMF) executive board late on April 11 approved a $20bn bailout package for Argentina, capping weeks of intense negotiations aimed at shoring up the country's ailing foreign reserves. The funds are to be distributed over four years, with an immediate disbursement of $12bn and an additional $2bn available after a June review, Perfil noted.

This financial support is being complemented by the World Bank's $12bn three-year package and the Inter-American Development Bank's (IDB) commitment of up to $10bn for public and private sectors over the same period.

Following the IMF agreement, Economy Minister Luis Caputo announced plans to lift exchange rate controls, known locally as "el cepo" and in place since 2019, early this week. “The agreement will allow us, starting Monday, to lift the exchange rate controls that so severely limit the normal functioning of the economy,” Caputo said from government headquarters in Buenos Aires, as cited by AP. “Investments that are currently pending will begin to come into Argentina to take us to this new stage.”

This comes after President Javier Milei insisted that the IMF deal would provide him with the financial firepower he needs to eliminate investment-deterring capital controls and reintegrate the country into global financial markets.

Former Argentine Central Bank President Martín Redrado, who participated in a private meeting convened by Caputo with professional economists, expressed cautious optimism. “We all have positive expectations about what might happen, but the key in the short term is the settlement of foreign currency by the agricultural sector,” he said in an interview with Rivadavia AM 630.

Redrado noted that the Central Bank has lost approximately $2.5bn in reserves in just 20 days, making it essential to reverse this trend for exchange rate predictability. He estimated that starting in the coming weeks, approximately $3bn per month could be received from agricultural export settlements.

The Washington-based lender described the programme as one that “supports a path toward entrenching macroeconomic stability, strengthening external sustainability, and laying the foundation for stronger and more resilient growth,” adding that its key pillars include “maintaining a strong fiscal anchor, transitioning towards a more robust monetary and FX regime."

This financial package is a remarkable win for Milei's economic stabilisation efforts, though the removal of exchange controls presents both opportunity and risk. While it may attract foreign investment, the Milei administration will want to ensure that Argentines see jobs and wage growth, particularly after multiple protests against the government’s sweeping public spending cuts.