All the details of the start of Milei's economic program's third phase

In a key announcement for Argentina's economic future,  the President of the Nation Javier Milei, along with the Minister of Economy, Luis "Toto" Caputo, confirmed the start of a new phase of the economic program aimed at consolidating the stabilization process.

This stage relies on five central measures that, according to the Executive, will mark a structural change in the country's monetary and exchange rate policy.

Lifting of the currency control and free access to the exchange market

One of the most significant decisions is the elimination of the currency control. Starting in the coming days, individuals will be able to access the foreign exchange market without restrictions. Meanwhile, companies are allowed to remit dividends corresponding to the current year, which is interpreted as a clear signal of economic normalization. For dividends and debts accumulated during 2024, companies will be able to settle them through the subscription of a dollar bond issued by the Central Bank (BCRA).

Additionally, the Executive ordered the elimination of the scheme known as Dollar Blend, which until now allowed a combined quotation between the official exchange rate and the cash with settlement. This decision aims to make the exchange system more transparent and strengthen predictability.

Injection of international funds and recapitalization of the BCRA

The plan includes an injection of USD 23.1 billion from multilateral organizations, of which USD 15 billion will come from the International Monetary Fund (IMF).

These funds will be freely available and mainly intended for the recapitalization of the Central Bank. The immediate availability of foreign currency seeks to support the transition to a more flexible and well-supported floating regime.

Floating regime with bands: between $1000 and $1400 per dollar

The new exchange rate regime will operate under a band system. The dollar will float between a minimum of $1000 and a maximum of $1400, adjusting monthly by 1%: the lower band will decrease by that percentage and the upper band will increase by the same proportion.

If the exchange rate exceeds the upper band, the BCRA will intervene by selling foreign currency and absorbing pesos from the market. If it falls below the lower band, the BCRA will buy foreign currency without sterilizing the pesos, thus expanding its intervention capacity without affecting overall liquidity.

Additional fiscal adjustment to reinforce the surplus

As part of the package, it was decided to apply an extra fiscal adjustment equivalent to 0.3% of GDP, which represents 0.5% annualized. With this measure, the Government projects to achieve a primary fiscal surplus of 1.6% by the end of this year. The effort aims to reinforce macroeconomic sustainability, reduce dependence on monetary financing, and send clear signals to the markets.

With this new economic framework,  the Government seeks to move decisively toward a scheme of sustained stability, anchored in fiscal balance, the normalization of the exchange market, and the rebuilding of international reserves.