Argentina says its new IMF programme will total US$20 billion

Argentina’s future programme with the International Monetary Fund will be for US$20 billion, while executive board approval could take weeks, Economy Minister Luis Caputo said.

Caputo stopped short of announcing a formal staff-level agreement on Thursday, but it’s the most concrete detail of the four-year programme after several months of negotiations between the Fund and President Javier Milei’s administration. Caputo added that he spoke with IMF Managing Director Kristalina Georgieva and they agreed to announce the amount given recent market volatility and speculation about the deal.

“I commented to her that it could take you some weeks to convene the board, and taking into account the rumours saying that the IMF demands a currency devaluation, I told her it’d be good to say the amount that we’ve agreed upon that the staff will bring to the board for approval,” Caputo said at an insurance conference in Buenos Aires. “That amount is US$20 billion.”

The economy minister added that funds combined from the IMF, World Bank, Inter-American Development Bank and regional bank CAF would put Argentina’s Central Bank reserves near US$50 billion, sparking speculation of significant cash injections up front. Today, reserves stand at US$26.2 billion. He also said the programme is different from every other programme in IMF history, as Argentina has already made the fiscal and monetary adjustments the fund typically demands before disbursements.

Bloomberg News reported last week that the programme would be around US$20 billion. IMF spokeswoman Julie Kozack didn’t confirm the amount of the upcoming programme on Thursday, but said it would be substantial and ultimately determined by the executive board.

“Discussions are focused on a sizeable financing programme,” Kozack said during a routine press conference in Washington after Caputo spoke. “Disbursements will come in tranches over the life of the programme. But the exact phasing and the size of each tranche is also, of course, part of the discussions that are underway.”

Argentina’s dollar bonds climbed to session highs on the comments, pacing gains in emerging markets. Benchmark notes due 2035 rose as much as 0.6 cents before giving back some of those gains to trade at some 64 cents on the dollar, according to indicative pricing data compiled by Bloomberg.

The lack of clarity over whether Milei and his team will keep the peso strong or let it weaken against the dollar after the deal is announced has frustrated investors in recent weeks. It’s ignited a fresh wave of volatility in the country’s assets, with markets betting the peso is on the verge of another devaluation.

“This is positive news for Argentina as it clears an important hurdle,” Carlos Carranza, an emerging markets money manager at Allianz Global Investors, said by email. “Many investors had been worried about the size of the IMF programme, and whether or not the agreement would be enough to provide the short-term financial relief that Argentina needs to face its debt obligations.”

The next big question about the programme will be how much of the US$20 billion Argentina will receive up front, if the IMF board approves the deal. Caputo didn’t provide those details, but the timing is important since Milei’s government doesn’t owe any principal to the IMF from previous programmes until September 2026. By Fund rules, countries may repay principal debt owed to the IMF — but not interest — using new cash from the lender.

Morgan Stanley estimates that Argentina will get US$5 billion of disbursements up front in 2025. The first could give Milei some breathing room to boost the Central Bank’s depleted foreign reserves, and then lift currency controls before returning to international debt markets after a sovereign default five years ago.

Investors say Caputo hinted Thursday most of the funding would come up front.

“While he didn’t explain how or why, he seemed to suggest the IMF would somehow disburse everything or the majority of the programme at the start,” Gabriel Caamano, an economist at Buenos Aires-based consultancy Outlier, said by text message. “The key is in the expectation he generated when he talked about the amount of international reserves.”

Talks over Argentina’s 23rd IMF programme, the third in seven years, mark another chapter in a saga that’s scarred both sides. A US$50-billion programme given to former president Mauricio Macri in 2018 failed to stabilise the economy, veering off course once Macri lost his re-election bid. A second programme in 2022 by Macri’s opponent, Alberto Fernández, was nearly suspended.

Caputo’s announcement Thursday will revive a technical debate among investors and analysts about so-called fresh funds — the IMF money Argentina has after factoring in its principal debt to the IMF.

Any fresh funding depends on the timeline. While Argentina owes no principal to the IMF until September 2026, over the four-year programme, principal exceeds about US$14 billion into April 2029, which implies much less fresh funding. Some define the timeline for fresh funding by Milei’s term, which ends in December 2027.