Argentina Capital Controls Lifting and the FX Regime Through 2026

April 11, 2025 EFF and the seventy two hour cepo lift #

The IMF Executive Board approved a forty eight month, USD 20 billion Extended Fund Facility for Argentina on April 11, 2025, the largest new money program negotiated by the Fund in 2025. The first disbursement of USD 12 billion landed on April 15, 2025 against a staff projected reserve floor of USD 4 billion by mid 2025 and USD 13.7 billion by end 2026. The Fund framed the program around three legs: a fiscal anchor of 1.6 percent of GDP primary surplus, a monetary anchor of zero financing of the Treasury, and an external anchor in the form of a managed float inside an explicit band.

On April 14, 2025 Economy Minister Luis Caputo and BCRA President Santiago Bausili announced Phase 2 of the FX architecture. The official rate was floated inside an ARS 1,000 to 1,400 per dollar band, with the floor crawling down at 1 percent monthly and the ceiling crawling up at 1 percent monthly. The PAIS tax was eliminated. Commercial importers received spot access on April 14, retiring the thirty day deferred schedule. Critically, the cepo for individuals was lifted in full: the USD 200 monthly retail cap, the 30 percent surcharge on travel and card spending abroad, and the dollar savings restriction were all removed. The blue chip swap and MEP spread to the official compressed inside two weeks from 25 percent on April 10 to under 8 percent by April 30.

BCRA intervention rules and the crawling band architecture #

The band float design is the operational core of the post cepo regime. Inside the ARS 1,000 to 1,400 band the BCRA does not intervene. At the floor, the BCRA buys dollars without sterilization. At the ceiling, the BCRA sells dollars and sterilizes via LECAP issuance. The band crawls at 1 percent monthly in opposite directions, narrowing by 2 percent per month in nominal terms, and is reviewed at each quarterly IMF window. The architecture is closer to the Israeli 1991 to 1997 horizontal band than to the 1991 to 2001 Argentine convertibility regime.

The reserve trajectory validates the design. BCRA gross reserves moved from USD 26.2 billion in February 2025 to USD 39 billion by late April 2025, of which USD 12 billion was the IMF first disbursement, roughly USD 2 billion came from World Bank and IDB parallel disbursements, and the residual reflected harvest cycle inflows. Net reserves crossed from negative USD 8 billion in March 2025 to positive USD 4 billion by mid 2025. The BCRA absorbed roughly USD 7.2 billion at the official window across the 2025 harvest cycle. The PBoC renminbi swap drawn balance was reduced from USD 18 billion at program inception to USD 5 billion by Q1 2026, releasing the encumbrance that had distorted the net reserve concept since 2014.

Inflation glide and parallel dollar gap collapse #

Annual headline CPI peaked at 211.4 percent in December 2023 and at 292.2 percent in April 2024 on the carry through of the December 2023 devaluation. By March 2025 INDEC reported a twelve month rate of 117.8 percent and a monthly rate of 3.7 percent. By March 2026 the twelve month rate had fallen to roughly 35 percent. The IMF Article IV mission projects 22 to 26 percent annual inflation for end 2026, and the BCRA REM survey prints at 27 percent for the same horizon.

The disinflation has three engines. First, the elimination of monetary financing of the Treasury, codified in the EFF letter of intent. Second, the BCRA crawling peg, which slowed from 2 percent monthly through most of 2024 to 1 percent monthly from February 2025, before transitioning to the band float. Third, import liberalization under DNU 70 of 2023 and the unwind of SIRA era restrictions, which restored price competition in tradables and broke backward indexation in collective bargaining.

The parallel dollar gap is the single most visible price for the success of the regime. The blue dollar premium to the official, which had run between 50 percent and 200 percent across the 2019 to 2023 cepo, traded at 60 percent on December 9, 2023, fell to 25 percent on April 10, 2025, and compressed to under 10 percent within the first week after the band float. By Q1 2026 the blue and MEP gaps had stabilized in a 5 to 9 percent corridor, with the residual gap reflecting the cost of the legal vs grey channel rather than fundamental scarcity.

Trade balance reversal and the BOPREAL bridge #

The 2024 trade balance turned to a USD 19 billion surplus from a USD 6.9 billion deficit in 2023, the sharpest single year reversal since the 2002 default. Imports collapsed by 17 percent in real terms on the recession and the unwind of SIRA driven anticipation buying, exports grew 19 percent on a normalized harvest after the 2022 to 2023 drought, and the energy balance turned positive for the first full year since 2010. Hydrocarbon exports reached USD 9.8 billion in 2025 against USD 4.7 billion in 2023, with Vaca Muerta crude production rising from roughly 110,000 barrels per day at end 2023 toward 480,000 barrels per day by March 2026. The Vaca Muerta Sur trunkline and the Oldelval expansion, commissioned in late 2025, raised crude evacuation capacity to roughly 700,000 barrels per day, and industry guidance targets 1.0 million barrels per day by 2028.

BOPREAL, the Bonos para la Reconstruccion de una Argentina Libre issued by the BCRA from January 2024, was the bridge instrument that defused the pre 2024 importer arrears stock estimated at USD 42 billion at program inception. Three series settled roughly USD 10.4 billion of pre 2024 importer claims by Q2 2025, with the residual cleared via April 2025 spot access. The dollar paying, peso tradeable design let importers monetize at MEP rates while preserving BCRA hard currency, the most consequential balance sheet engineering of the program. The April 14, 2025 Phase 2 announcement closed the BOPREAL window, signaling that the 2025 importer cycle could clear at spot.

Sovereign curve normalization and MERVAL ADR rerating #

The sovereign hard currency curve compressed faster than any other variable in the stabilization. The Argentina 2030 USD bond, the most liquid restructured instrument from the 2020 Guzman exchange, traded above 25 percent yield through most of 2023 and at roughly 18 percent in mid 2024. By April 2025 post EFF, the AL30 traded at 12 percent. The 2035 and 2038 bonds compressed in parallel, and the 5 year credit default swap fell from 4,200 basis points in late 2023 to roughly 1,400 basis points by Q1 2026. The EMBI plus Argentina spread narrowed from 2,150 basis points in December 2023 to roughly 580 basis points in April 2025, the lowest reading since June 2019.

The Merval index in dollars, measured at MEP rates, rose from roughly USD 450 in November 2023 to USD 2,150 by April 2025 and traded near USD 2,400 in March 2026. The ADR universe rerated heavily. YPF moved from USD 11 in October 2023 to USD 49 by April 2025, Pampa Energia from USD 27 to USD 84, Banco Macro from USD 18 to USD 95. The rerating reflected three drivers: real interest rate normalization that compressed the equity risk premium, Vaca Muerta and lithium related earnings revisions, and RIGI which extended fiscal stability commitments to qualifying USD 200 million plus projects for thirty years. Province debt spreads followed at lag. PBA and Mendoza completed 2024 to 2025 FX restructuring exchanges that extended maturities at coupon haircuts of roughly 25 to 35 percent.

2026 risks: soybeans, provinces, stablecoins, and the Sri Lanka analogy #

The 2026 outlook concentrates risk in four vectors. First, the soybean export tax negotiation. The 33 percent retencion on soybeans, 31 percent on soy meal and oil, and lower rates on corn and wheat were temporarily reduced in early 2025 to incentivize harvest sales, with the temporary reduction set to expire on June 30, 2025 and a permanent rate to be legislated by end 2026. The Sociedad Rural Argentina and CIARA CEC have lobbied for a permanent reduction toward 20 percent, while the IMF has flagged retencion revenue as roughly 1.0 percent of GDP and necessary to preserve the primary surplus path. The tradeoff between export incentive and fiscal anchor is the binding constraint of the Q1 2026 harvest cycle.

Second, province FX restructuring. PBA, Mendoza, Salta, and Chaco hold roughly USD 12 billion of hard currency obligations across 2026 to 2030, with PBA and Mendoza already in 2024 to 2025 exchange agreements that pushed coupons and amortizations to 2027 and beyond. The federal government under DNU 70 of 2023 cannot bail out province FX, which means a province default cycle would feed back to the sovereign through contingent liability channels. Third, the stablecoin question. Argentine retail dollarization migrated heavily to USDT and USDC during the 2022 to 2024 cepo years, with on chain volumes estimated at USD 4 to 6 billion monthly by Chainalysis in 2024, and the post cepo regime is testing whether retail flows return to peso instruments or remain dollarized in stablecoin form. The BCRA has signaled tolerance, but the deposit base composition will determine whether the disinflation transmits fully.

Fourth, the Sri Lanka analogy. The Sri Lanka 2023 IMF EFF, signed March 20, 2023 under the Wickremesinghe government, anchored a primary surplus glide, a domestic and external debt restructuring, and a managed float that rebuilt reserves from USD 1.7 billion to roughly USD 5.6 billion by end 2024. Sri Lanka 2030 USD bond yields compressed from above 30 percent in 2022 to roughly 10 percent by Q4 2024. Argentina is following a structurally similar path with two differences: reserves are an order of magnitude larger absolute and per capita, and the political mandate is fresher. The relevant lesson from Colombo is that the curve compression is a function of program credibility and that the second program review window is where most stabilizations break. Argentina enters the second review in mid 2026 with the strongest performance criteria pass record since 2003, but the 2027 election cycle remains the open political question. The FX hedge book unwinding is already underway in the offshore peso NDF market, with twelve month NDF implied vols compressing from 90 percent in late 2023 to roughly 25 percent in March 2026, levels last seen pre 2018.

Sources #

• Argentina: Request for an Extended Arrangement Under the Extended Fund Facility, IMF Staff Report, April 11 2025
• Argentina First Review Under the Extended Arrangement, IMF Country Report, September 2025
• BCRA Reservas Internacionales y Liquidez en Moneda Extranjera, daily series
• BCRA Informe Monetario Mensual, March 2026
• BCRA BOPREAL Series 1, 2, and 3 Issuance and Settlement Reports
• BCRA REM Survey of Professional Forecasters
• INDEC Indice de Precios al Consumidor Nacional, Informe Tecnico, March 2026
• INDEC Intercambio Comercial Argentino, 2024 and 2025 annual reports
• Ministerio de Economia, Resultado del Sector Publico Nacional No Financiero
• Secretaria de Energia, Estadisticas Hidrocarburiferas y Vaca Muerta
• Caputo and Bausili Phase 2 Announcement Coverage, April 14 2025
• Argentina Cepo Lift and Band Float Coverage, La Nacion
• Argentina IMF EFF Program Coverage, Clarin Economia
• Infobae Mercados, Blue Dollar and MEP Daily Series
• Financial Times Argentina Sovereign Coverage and AL30 Yield Series
• Bloomberg Argentina 2030 USD Bond Yield and EMBI Plus Argentina Spread
• Sri Lanka 2023 EFF Program Comparator, IMF Country Report