By Maximilian Heath and Anthony Esposito
BUENOS AIRES (Reuters) – Argentina dismantled key parts of its years-long currency controls and loosened its grip on the peso on Friday as it sealed a $20 billion, 48-month Extended Fund Facility deal with the International Monetary Fund (IMF).
The IMF deal lays out an immediate disbursement $12 billion, and a first review is planned for June with an associated additional disbursement of some $2 billion, the IMF said.
The South American nation’s central bank announced that it will undo a fixed currency peg from Monday, letting the peso freely fluctuate within a moving band between 1,000 and 1,400 pesos per dollar, versus 1,074 at the close on Friday.
Argentina will eliminate major parts of the so-called “cepo” capital controls that have restricted access to foreign currency, the central bank said in a statement.
Companies from this year will also be able to repatriate profits out of the country, a key demand from businesses that could unlock more investment.
“As of Monday, we will be able to put an end to the foreign exchange restrictions which were imposed in 2019 and which limit the normal functioning of the economy,” Economy Ministry Luis Caputo said at a press conference.
(Reporting by Maximilian Heath in Buenos Aires, Adam Jourdan in London and Anthony Esposito in Mexico City; Additional reporting by David Lawder and Andrea Shalal in Washington; Editing by Aida Pelaez-Fernandez, Rosalba O’Brien and Himani Sarkar)
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