Argentina took major steps to fix its economy on Friday. It removed key currency controls and loosened its hold on the peso. These changes came after the country signed a $20 billion agreement with the International Monetary Fund (IMF).

IMF deal brings immediate money

Under this 48-month Extended Fund Facility, Argentina will receive $12 billion right away. Additionally, the IMF will conduct the first review in June. If that review goes well, Argentina will get another $2 billion.

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Peso to trade within a wider range

Meanwhile, the central bank announced a big policy shift. Starting Monday, it will remove the fixed exchange rate. As a result, the peso will float between 1,000 and 1,400 pesos per U.S. dollar. On Friday, it closed at 1,074 per dollar.

Country removes major capital controls

Furthermore, the central bank said it will scrap most parts of the “cepo” system. These strict capital controls had limited access to foreign currency for years. From now on, companies can send their profits outside Argentina. This change meets a key demand from investors. In turn, it could attract more foreign investment.

Economy Minister confirms the reforms

Later, Economy Minister Luis Caputo spoke about these changes at a press briefing. He said, “As of Monday, we will be able to put an end to the foreign exchange restrictions which were imposed in 2019 and which limit the normal functioning of the economy.”