Argentina sealed a $20 billion, 48-month Extended Fund Facility deal with the International Monetary Fund and, in a major policy move ahead of the deal, dismantled key parts of its years-long currency controls and loosened its grip on the peso.
- The deal is expected to help Argentina catalyze additional official multilateral and bilateral support, and a timely re-access to international capital markets.
- Argentina will eliminate major parts of the so-called “cepo” capital controls that have restricted access to foreign currency The capital controls, known here as “el cepo,” or “the clamp, ” are a tangle of regulations that help to stabilize the peso at an official rate and prevent capital flight from Argentina.
- Argentina needs the financial firepower to bolster depleted foreign currency reserves that are in the red on a net basis and have been falling in recent weeks, amid sticky inflation and a country risk index that has started to rise again.
(Source: DD News)
