'Fin de cepo': Argentina overhauls exchange rate access ahead of new IMF deal

Argentina’s government has announced sweeping changes to rules limiting access to foreign currency and its exchange rate regime ahead of a new financing agreement with the International Monetary Fund (IMF).

Speaking at a press conference on Friday evening, Economy Minister Luis Caputo said the country was entering “phase three” of its economic programme — a shift that will introduce a so-called "dirty float" or floating exchange rate limiting the peso to within a band of 1,000 to 1,400 per US dollar. 

The new regime will take effect on Monday, April 14, said the official.

If the peso reaches the upper limit of the band, the move would represent a 23 percent devaluation from the current exchange rate. 

Government officials said they do not expect the currency to hit that ceiling immediately, but the range introduces greater flexibility in the exchange rate, effectively acknowledging that the peso was overvalued. 

The Central Bank clarified that 1,400 pesos is the maximum value in the band, not a preset exchange rate. The peso will fluctuate within the band according to market conditions.

Milei's economic team hopes the adjustment will help narrow the gap with parallel market rates and strengthen competitiveness.

The announcement also included the elimination of the so-called 'dólar blend,' a mechanism that had allowed exporters to convert a portion of their earnings at a higher, more favourable rate.

By removing this tool, the government aims to unify the exchange market and improve the transparency of currency operations, while maximising the flow of foreign exchange into Central Bank reserves.

According to government estimates, the Central Bank will have US$28.1 billion available to support the transition out of currency controls. This figure includes expected IMF disbursements, the Chinese swap line, and repo agreements with global financial institutions.

The policy change marks an official recognition that the peso had become significantly misaligned — a point long raised by IMF staff and independent analysts.

Documents shared with reporters during Caputo’s televised remarks and released by the Central Bank imply that Argentina will have access to as much as US$15 billion of the US$20 billion agreed in fresh funds with the IMF under its new programme.

The agreement is set to be approved by the IMF's Executive Board imminently.

As part of the plan, the government will replace the exchange rate anchor with a monetary anchor focused on controlling the monetary base and eliminating money printing to finance the deficit. 

In support of the transition, the Central Bank also announced it would boost reserves, including through the renewal of a US$5-billion currency swap with China, which was announced earlier this week.

Caputo said that lifting the foreign exchange controls would help attract capital inflows to Argentina and pave the way for greater investment.

The new regime aims to eliminate the informal “blue dollar” market, lift the monthly US$200 cap on foreign currency purchases for individuals.

– TIMES/NA