Argentina IMF Year Two: Reserve Build, Cepo Sequencing, and the 2026 Stabilization Bet

April 2025 EFF and the partial cepo unwind #

The April 11, 2025 IMF Board approval of a 48 month, USD 20 billion Extended Fund Facility was the largest new money program negotiated by the Fund in 2025 and the eighth program of Argentina's IMF history. It replaced the 2022 Stand By Arrangement, which had failed against every quantitative performance criterion in 2022 and 2023, and consolidated outstanding repurchase obligations into a single anchor. The first disbursement of USD 12 billion was released on April 15, 2025, with the balance staged across quarterly windows through 2029. The Fund framed the adjustment as front loaded fiscally and back loaded externally, the inverse of the 2018 sequence.

Three days after approval, on April 14, 2025, the Caputo Bausili team executed Phase 2 of the FX architecture. The official rate was floated inside a band of ARS 1,000 to 1,400 per dollar, with floor and ceiling crawling at 1 percent monthly in opposite directions. The PAIS tax was eliminated. Commercial importers gained spot access, retiring the 30 day deferred schedule. The cepo for individuals was retained, including the USD 200 monthly cap and the 30 percent surcharge on travel and card spending abroad, on the logic that retail dollarization risk required a residual control until net reserves cleared the USD 15 billion EFF threshold. 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 reserve targets and the path from negative net to positive #

The BCRA's net international reserve position at program inception in December 2023 was negative roughly USD 11 billion, after subtracting the People's Bank of China renminbi swap, BIS facilities, and other encumbrances from gross reserves of USD 21.3 billion. The 2024 program path, inherited under the lapsed Stand By, lifted net reserves to roughly negative USD 8 billion by program transition in March 2025. The April 2025 EFF set a net reserve target of USD 9.6 billion by end H1 2025, an improvement of USD 17.6 billion over 18 months, and a target of USD 14.5 billion by end 2026. The IMF First Review in September 2025 confirmed performance inside the band, with the BCRA having absorbed roughly USD 7.2 billion via direct purchases at the official window during the 2025 harvest cycle.

Composition matters operationally. Roughly USD 9 billion came from net IMF disbursements after EFF repurchases. Vaca Muerta crude and condensate exports added USD 4.5 billion of incremental dollar inflows in 2025, with the Energy Secretariat reporting a hydrocarbon trade surplus of USD 6.1 billion versus USD 0.9 billion in 2023. BCRA gold sales executed in mid 2025, totaling roughly 65 of the 1.94 million troy ounces in custody, generated approximately USD 4.6 billion at LBMA fix prices in the USD 2,300 to 2,400 band, a move criticized by the opposition and Vice President Villarruel but upheld by the Procuracion del Tesoro. The 2024 tax amnesty mobilized roughly USD 22 billion of resident offshore holdings, of which USD 4 billion converted to onshore deposits. RIGI linked direct investment inflows added another USD 2 billion through Q1 2026.

Inflation glide from 211 percent to 35 percent #

Annual headline CPI peaked at 292.2 percent in April 2024, twelve months after the December 2023 baseline of 211.4 percent. By March 2026 INDEC reported a twelve month rate of 35.4 percent, the lowest reading since November 2018, and a monthly rate of 2.4 percent. The disinflation has three engines. First, the elimination of monetary financing of the Treasury, codified as a zero target in the EFF letter of intent and verified at every quarterly review since program inception. Second, the BCRA crawling peg, which slowed the official rate adjustment from 2 percent monthly through most of 2024 to 1 percent monthly from February 2025, then transitioned to the band float in April 2025. Third, the import liberalization under DNU 70/2023 and the unwind of SIRA era restrictions, which restored price competition in tradables and broke backward indexation in collective bargaining.

The wage price nexus has reset around the crawl rather than backward looking inflation. INDEC's coeficiente de variacion salarial for the registered private sector printed 2.4 percent monthly in February 2026 against headline CPI of 2.5 percent, the textbook signature of a credible nominal anchor. Core CPI tracked headline at 2.2 percent in March 2026, with regulated prices contributing the residual gap as energy and transport tariffs continue to catch up to cost recovery. The risk of pass through from the April 2025 band float was contained by the 25 percent spread compression that occurred mostly inside the wholesale FX market rather than feeding through to retail prices, a distinct outcome from the 2018 and 2019 episodes. The IMF Article IV mission projected a 23 percent annual outturn for end 2026, against the BCRA REM survey of professional forecasters at 27 percent.

Primary surplus and the Vaca Muerta export turn #

The 2025 primary fiscal surplus of 1.5 percent of GDP, marginally below the 1.6 percent EFF target but inside the program band, extended the structural break achieved in 2024. The 2024 closure relied 55 percent on expenditure compression and 45 percent on inflation linked revenue gains, while 2025 ran closer to a 60 to 40 split as the PAIS tax phase out reduced revenue. Real public sector wages remained roughly 18 percent below December 2023 by Q1 2026, provincial transfers 22 percent below baseline, and capital expenditure 70 percent below the 2023 level. The IMF Fiscal Monitor placed Argentina's structural primary adjustment over 2024 to 2025 at 4.6 percentage points of GDP, the largest two year consolidation by an emerging market democracy outside a banking crisis since the IMF series began.

The external offset to harvest exposure is the energy turn. Vaca Muerta crude production reached 480,000 barrels per day in March 2026, up from 290,000 in December 2023, on YPF, Vista, Pampa Energia, Pluspetrol, Tecpetrol, and Shell activity. The Vaca Muerta Sur trunkline and the Oldelval expansion commissioned in late 2025 raised crude evacuation capacity to roughly 700,000 barrels per day. Hydrocarbon export revenue reached USD 9.8 billion in 2025 against USD 4.7 billion in 2023. Industry guidance targets 1.0 million barrels per day by 2028 and 1.5 million by 2030, which at USD 70 per barrel implies hydrocarbon exports of roughly USD 30 billion per year.

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 of USD 42 billion at program inception. Three series settled roughly USD 10.4 billion of 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.

LIBRA scandal and the October 2025 midterm test #

On February 14, 2025 President Milei posted to his X account a promotional message endorsing LIBRA, a Solana based token launched that day by Hayden Davis and Kelsier Ventures. Within hours, LIBRA traded to a market capitalization above USD 4 billion before collapsing 95 percent as insiders unwound positions, leaving an estimated 75,000 retail wallets, of which roughly half were Argentine resident, with realized losses near USD 250 million in aggregate. The post was deleted within five hours. A federal investigation under prosecutor Eduardo Taiano opened on a fraud and influence peddling track. The Casa Rosada formed an internal investigation task force under Karina Milei. Opposition deputies filed an impeachment motion under Article 53 of the Constitution, which failed to clear the Chamber of Deputies in May 2025 by 138 to 102, with La Libertad Avanza, the PRO, and the bulk of the UCR caucus voting against opening the trial.

The market response was contained. The peso traded inside the existing crawl bands, the Merval declined 4 percent in the week of February 17 before recovering, and the AL30 spread widened by roughly 60 basis points before retracing within ten sessions. The episode did not derail the April 2025 EFF approval, structured around macroeconomic rather than governance criteria, but it consumed political capital before the midterms. The October 26, 2025 election nonetheless validated the Caputo Bausili Quirno axis. La Libertad Avanza expanded its Chamber of Deputies caucus from 38 to 81 seats and its Senate caucus from 7 to 19, on a coalition slate with the PRO. The expanded caucus removes the immediate parliamentary risk to DNU 70/2023 and to Ley Bases, and lowers the probability of pre 2027 fiscal slippage that historically broke Argentine programs in election years.

Reform durability and the Strategos scenario set #

The Strategos scenario discipline distinguishes three durability cases for the program through end 2026 into the 2027 cycle. The base case, at 55 percent probability, sees net reserves cross the EFF USD 15 billion threshold in Q3 2026, the cepo for individuals lifted in Q4 2026, annual inflation at 22 to 26 percent by year end, and a return to international debt markets at AL30 yields below 9 percent. The upside case, at 20 percent, layers a Vaca Muerta evacuation second stage and a soybean cycle above 2025, lifting reserves to USD 22 billion and compressing AL30 spreads under 7 percent.

The downside case, at 25 percent probability, runs through three triggers. A bad harvest on the scale of 2018 or 2022 would subtract USD 8 to 12 billion from the goods balance and force a renegotiation of the EFF reserve path. A renewed LIBRA style governance shock would reopen the impeachment vector that the May 2025 motion closed. A peso speculative attack triggered by a soft 2027 primaries reading or a Caputo Bausili exit would test the band float architecture. Macro financial risk concentrates in three areas: hard currency public debt service of USD 14.2 billion in 2026 and USD 16.8 billion in 2027 against a residual financing gap of USD 6 to 8 billion per year absent market access, commodity exposure with soybean futures at USD 11.20 per bushel against a USD 10.50 budget assumption, and the political durability function whose argument is the real wage path. The program is internally coherent. Whether it is politically durable is the open question, written in the 2026 inflation outturn and the speed of cepo removal for individuals.

Sources #

• Argentina: Request for an Extended Arrangement Under the Extended Fund Facility, Staff Report, April 11 2025
• Argentina First Review Under the Extended Arrangement, September 2025
• Informe Monetario Mensual y Reservas Internacionales, March 2026
• BOPREAL Series 1, 2, and 3 Issuance and Settlement Reports
• Indice de Precios al Consumidor Nacional, Informe Tecnico, March 2026
• Resultado del Sector Publico Nacional No Financiero, 2025 closure
• Secretaria de Energia, Estadisticas Hidrocarburiferas y Vaca Muerta
• Argentina Cepo Unwind and Band Float Coverage, April 14 2025
• LIBRA Token Investigation and Impeachment Vote Coverage
• Argentina EFF and Reform Tracker 2025 to 2026
• Argentina Sovereign Coverage and Reserve Build Analysis
• October 2025 Midterm Election Results, Camara Nacional Electoral