Argentina concludes the deal of the International Monetary Fund with a value of 20 billion dollars, and the tears of currency controls

Written by Maximilian Heath and Anthony Esposito

BUNOS AIRES (Reuters)-Argentina closed the $ 20 billion fund attachment deal and 48 months with the International Monetary Fund on Friday, and in a major policy before the deal, dismantled the main parts of the currency controls that lasted years ago and unloaded their grip on the bizo.

The International Monetary Fund will spend $ 12 billion by next Tuesday, while two billion dollars will be available by June.

The Argentina deal is expected to help stimulate the formal and bilateral support, and timely reaches international capital markets, “said the International Monetary Fund.

“The main columns of the program include maintaining a strong financial anchor, moving towards a more powerful system and FX system, with greater flexibility in the exchange rate,” he added in a statement.

Earlier, the Central Bank of South America announced that it would back down from linking a fixed currency from the two, allowing the pyseo to volatility in a moving range between 1000 and 1400 peso per dollar, compared to 1,074 at the end of Friday.

The central bank said in a statement that Argentina will eliminate the main parts of the so -called “CEPO” capital controls that restrict access to foreign currency.

This year, companies will be able to return profits to the country outside the country, a major demand from companies that can open more investment.

“As of Monday, we will be able to put an end to the foreign currency restrictions imposed in 2019 that limit the natural performance of the economy,” Luis Kapoto told a news conference.

Editorial President Javier Mili addressed the nation in a televised speech on Friday night and stated that Argentina was “in a better position than ever to bear external turmoil.”

However, the report of the International Monetary Fund has warned of the $ 20 billion deal that “negative risks are still high”, as the implementation of the program can be challenged through high global trade tensions, locally, through the fluctuations to which the upcoming electoral cycle and fragile social conditions are added.

“This is a value reduction”

The new Buso exchange rate system can weaken approximately a third if the currency reaches the edge of the band, although the central bank is likely to have some tools to intervene. The bank said the band will expand 1 % every month.

The politics step came before the final International Monetary Fund’s gesture, which is the twenty -third program, in a long and accumulated history between the nation that produces grains and the introduction to which Washington is based.