In a brief press release last night the International Monetary Fund announced it had reached a staff level agreement with Argentina for a 48-month Extended Fund Facility in the amount of $20 billion. The Fund claims that the $20 billion will support the “next phase” of the Milei government’s neoliberal economic reforms, which thus far have been savage, to ensure “macroeconomic stability and sustainability.” The Executive Board will reportedly give its final approval on April 11. The Fund has provided no details on conditionalities, time frames, interest rates or other terms but has made clear it expects a significant currency devaluation which Milei and his Finance Minister Luis Caputo have repeatedly denied will happen.
They are desperate to avoid the negative effects of a devaluation prior to the October legislative elections in which Milei’s party, the LLA, must have a good showing.The Fund has reportedly agreed to “front load” the loan with an initial large disbursement possibly as high as $14-15 billion. Since no payments to the Fund are due until September of 2026, the suspicion is that a large initial disbursement will allow the government to continue intervening in the currency markets, as Luis Caputo has been doing for months, to keep the peso/dollar exchange rate in check. At a time when the country’s financial markets are convulsed as a result of Donald Trump’s tariff war, a crisis in the foreign exchange markets has to be avoided at all cost.
