Argentina Lifts Currency Controls, Peso Falls 12%; Stock Market and Bonds Surge

Argentina has lifted its currency controls, known as the 'cepo', following an agreement with the International Monetary Fund (IMF) for a $20 billion loan program. The move resulted in a 12% depreciation of the peso, which now trades at around 1,200 pesos per dollar. President Javier Milei has declared April 14, 2025, as 'Día de la Liberación' to mark the end of six years of currency restrictions. The decision to allow the peso to float more freely was accompanied by significant market reactions. The peso's value slid to the lower end of the newly established exchange rate band of 1,000 to 1,400 pesos per dollar. Meanwhile, Argentina's stock market rose by 4.7%, and treasury bonds saw gains, with some stocks and bonds increasing by up to 14%. The dólar blue, or parallel market rate, fell by 6.55%. Milei has expressed optimism about the economic future, predicting that inflation will drop below 1% by mid-2025 and reach zero by 2026. He also stated that the official exchange rate is expected to trend downwards, with all monetary factors pushing for a lower rate. This is part of a broader economic strategy aimed at stabilizing the peso and attracting foreign investment.