The Argentine peso surged 12% to 920 per dollar in Sunday trading on the official market after President Javier Milei confirmed the removal of remaining capital controls, effective Monday morning Buenos Aires time. The move marks the most significant currency liberalization since Milei's December 2023 inauguration and brings Argentina formally back into the IMF's standard exchange regime classification.
Milei made the announcement at a joint press conference Sunday afternoon with IMF Managing Director Kristalina Georgieva, alongside disclosure of a fresh $14 billion Stand-By Arrangement supplement. Total IMF support now stands at $58 billion, the largest single-country exposure in the institution's history. Foreign reserves at the central bank have rebuilt to $42 billion from a low of $9 billion in early 2024.
Bond Market Cheers
Argentine sovereign dollar bonds rallied across the curve Sunday. The 2030 USD bond climbed 4.1 cents to 86.40, while the 2046 long bond gained 5.6 cents to 78.20. Sovereign credit default swap spreads tightened by 184 basis points to 412 basis points, the lowest reading since 2018. Bloomberg's Latin America sovereign bond index gained 2.1%.
Argentine equity ADRs rallied. YPF (YPF) gained 8.4% in pre-market, Banco Macro (BMA) rose 11.2%, Grupo Galicia (GGAL) climbed 9.8%, and BBVA Argentina (BBAR) added 10.1%. The Global X MSCI Argentina ETF (ARGT) was indicated 6.4% higher.
Inflation Continuing to Cool
Argentina's March consumer price inflation printed at 2.1% month-on-month, the lowest reading since late 2021, with the year-on-year rate moderating to 84% from 211% one year earlier. Capital control removal could initially stoke imported inflation through a controlled depreciation, but Milei pledged that the central bank would absorb residual peso volatility.