Argentina says it will lift the country’s strict currency controls with the help from the IMF

BUENOS AIRES, Argentina (AP) — Argentine President Javier Milei’s economy minister announced on Friday that the libertarian government would lift the country’s strict capital and currency controls in a few days, a high-stakes gamble made possible by a new loan from the International Monetary Fund.

In a nationally televised address, Economy Minister Luis Caputo also said the IMF’s executive board had decided to approve the $20 billion bailout package announced earlier this week, which offers a lifeline to Argentina’s dangerously depleting foreign currency reserves.

“The agreement will allow us, starting Monday, to lift the exchange rate controls that so severely limit the normal functioning of the economy,” Caputo said from the government headquarters in Buenos Aires.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

BUENOS AIRES, Argentina (AP) — Monthly inflation in Argentina accelerated in March to its fastest pace in seven months, the country’s official statistics agency reported on Friday, with consumer prices up 3.7% from the month before mainly as a result of rising food prices.

The steep hike, compared to a 2.4% inflation rate for February, surprised financial analysts and worried Argentines who have become increasingly concerned that President Javier Milei’s progress on lowering price increases might be stalling. The last time inflation rose this much on a monthly basis was in August 2024, when prices jumped 4.2%.

The inflation numbers come at a critical juncture for South America’s second-biggest economy. Earlier this week, the International Monetary Fund announced a new $20 billion loan agreement with Argentina. The IMF’s executive board is expected to vote on the program later Friday.

While Milei considers the IMF deal crucial to his efforts to stabilize Argentina’s long troubled economy, the still-vague agreement has spread jitters among traders who expect that Argentina will have to impose a new monetary and foreign-exchange policy as a condition of receiving the cash. But further devaluing the peso, now pegged to the U.S. dollar, risks capital flight and even higher inflation.

Milei came to power in December 2023 with a pledge to pull Argentina out of its yearslong inflationary spiral.