MercoPress. South Atlantic News Agency

IMF money arrives in Buenos Aires, boosting reserves

“The new agreement is more favorable and should facilitate access to international credit,” said Economy Minister Luis 'Toto' Caputo

Argentina has received a US$2 billion disbursement from the International Monetary Fund (IMF), a move that has boosted the country's international reserves and provided a temporary reprieve from exchange rate volatility. The funds, part of an agreement reached in April, have raised the Central Bank's reserves to over US$43 billion, the highest since early 2023.

The transfer came after the IMF's Board of Directors approved the first review of the agreement with Argentina. This disbursement helped calm the foreign exchange market, causing the official dollar to drop to AR$1,370 after a significant increase in July. However, the relief is expected to be short-lived, as the country will soon need to pay interest and fees to the IMF.

The credit agency also announced a key change to the agreement, relaxing the target for accumulating net international reserves for 2025 by US$5 billion. Additionally, the next review of the program has been pushed back from September to February 2026. This is seen as a more favorable and flexible arrangement for the government of President Javier Milei.

In July, the official exchange rate increased by 13%, primarily due to a decline in the supply of dollars resulting from lower agricultural sales. On Monday, the official dollar fell by AR$5 and traded at AR$1,320 for purchase and AR$1,370 for sale. The “blue” (a euphemism for black market) dollar closed at AR$1,305 for purchase and $1,325 for sale. Due to the jump in the dollar, companies are raising prices by between 3% and 9%.

Since Milei took office, reserves have increased by 102.8%, from US$21.208 billion on Dec. 7, 2023.

“The new agreement is more favorable and should facilitate access to international credit,” said Economy Minister Luis Toto Caputo.