Economic policy Argentina relaxes tough currency controls after aid package
International organizations have announced aid packages totalling up to 42 billion dollars for Argentina. Following the release of a billion-dollar loan by the International Monetary Fund, Argentina's government relaxed its strict currency controls.
12.04.2025, 02:58
12.04.2025, 05:15
SDA
In future, private individuals in Argentina will be able to buy unlimited amounts of US dollars, as announced by Minister of the Economy Luis Caputo. Previously, the exchange rate was limited to 200 dollars per month. Instead of a fixed exchange rate, the exchange rate will in future move freely within a certain range depending on supply and demand.
The International Monetary Fund (IMF) had previously granted the government in Buenos Aires a new loan of 20 billion US dollars over a period of four years. The World Bank contributed 12 billion dollars. The Inter-American Development Bank also announced a financial package of up to 10 billion dollars over a period of three years.
Recognition of progress
The IMF declared that 12 billion dollars would be made available to Argentina immediately. The decision on the aid package was made "in recognition of the impressive progress made by the Argentine government in stabilizing the country's economy", explained the head of the organization, Kristalina Georgieva, in the online service X. "It is a vote of confidence in the government's determination to push ahead with reforms, promote growth and achieve higher living standards for the Argentine people".
This is the 23rd time since Argentina joined the IMF in 1956 that the Washington-based institution has provided financial assistance to the country. Argentina's current debt to the IMF, which stems from a 2018 loan taken out under the then center-right president Mauricio Macri, amounts to 44 billion dollars. The new loans are now to be used to service the debt to the IMF and increase the central bank's currency reserves.
The World Bank also described its aid package as a "strong vote of confidence in the government's efforts to stabilize and modernize the economy". Of the 12 billion dollars, 1.5 billion would be released immediately. The aim is to "attract private investors".
Strict austerity measures
The support packages represent a major success for Argentine President Javier Milei, who has been subjecting Argentina to strict austerity measures since taking office in December 2023. The country's economy will grow "like never before", said Milei in a speech on Argentinian television following the announcement of the financial injections. "Argentina will be the country with the strongest growth in the next 30 years".
In protest against the harsh austerity program of Milei's ultra-liberal government, numerous people in Argentina went on strike on Thursday. Trains, subways and cabs did not run, airplanes were grounded and port terminals were at a standstill. Banks, the post office and waste collection services were also on strike. It was the third general strike in Argentina since Milei took office almost a year and a half ago.
