ARGENTINA: Cepo Ends & more – 17th April 2025

¡Buenos días from Greenway Parks! This is the Rorshok Argentina Update from the 17th of April twenty twenty-five. A quick summary of what's going down in Argentina.

On Friday the 11th, Luis Caputo, the Economy Minister, surprised everyone by revealing that Argentina would remove its currency controls, also known as the cepo cambiario, the following Monday, allowing people to freely buy dollars while adopting a new exchange rate band between 1,000 and 1,400 pesos per dollar. On Monday the 14th, the dollar opened at 1,250 pesos and traded as high as 1,350 on some platforms. Banks scrambled over the weekend to adapt their systems, as people can now buy dollars freely and companies can send dividends abroad — but only on profits made from twenty twenty-five onward.

The way the rate band works is that The Central Bank will step in only if the peso hits the limit, which currently stands at 1,400 dollars but will widen gradually each month. Still, economists expect the peso to weaken by at least 15%, possibly pushing inflation higher in April.

On Monday the 14th, importers also gained immediate access to foreign currency, and the previous thirty-day waiting rule will no longer apply. Neither will the mandatory parking period — the rule that forced people to hold certain bonds for a minimum number of days before selling them.

However, a 30% tax surcharge still applies to spending abroad — this includes trips and credit card purchases in foreign currency. While dollar savings and transfers won’t carry that extra tax anymore, any tourism-related expenses will. To avoid the 30% fee on card payments, users can still choose to pay off their statements in dollars instead of pesos.

So, why did the end of the cepo come faster than previously anticipated? Because Argentina finally secured a twenty billion dollar deal with the International Monetary Fund, or IMF, with twelve billion dollars landing right away, giving a major shot of confidence to President Milei. Another two billion could be available in June depending on the first review of the program.

At first, this triggered speculation about a possible devaluation, so right after the IMF’s approval, the Central Bank dumped 400 million dollars to stop the peso from sliding further, marking its biggest single-day intervention since March. However, Caputo said the funds will help rebuild Central Bank reserves and push forward the fight against inflation. Analysts warn inflation risks still loom and everything now depends on Milei’s team delivering real economic results.

The news of the end of the cepo has had ripple effects across international news outlets. The Economist published a piece analyzing Argentina’s history of failed IMF agreements and the future of Milei’s economic strategy.

To read the full article, follow the link in the show notes!

After loosening currency controls, President Milei urged soybean producers to sell their crops right away. With harvest season underway, Milei needs the dollars from soy exports to boost Central Bank reserves, but farmers have been hesitant to sell, making this the slowest forward-selling pace in ten years. To speed things up, Milei temporarily lowered export taxes—especially for soy, the country’s top export—but warned that rates will rise again after June.

The headlines about the cepo distracted people from noticing that inflation spiked again in March, with prices climbing 3.7% — marking the second month in a row of acceleration and the steepest jump since September. The annual inflation rate now sits at 56%, with an 8.6% rise in twenty twenty-five so far. The main culprits behind the surge were sharp increases in education costs, which jumped 21% as the school year kicked off, and a nearly 6% rise in food and drinks, especially vegetables and meat.

On top of everything that happened this past week, Scott Bessent, the US Treasury Secretary, landed in Argentina on Monday the 14th for high-level talks with officials and business leaders, aiming to show full backing for President Milei’s economic overhaul. After meeting with Bessent, Milei announced that Argentina is ready to move forward with a trade agreement with the United States, calling it a win-win that would improve access to better goods and services for both countries.

On that note, Yamandú Orsi, the Uruguayan President, believes that Donald Trump’s push for higher US tariffs is putting pressure on Europe to speed up the long-stalled EU–Mercosur trade deal. Mercosur, the regional trade bloc that includes Argentina, Brazil, Paraguay and Uruguay as full members, is for the most part eager to move forward, but the EU continues to review the deal legally. They hope to finalize it before year’s end, though internal disagreements and environmental regulations still pose challenges.

Despite Milei’s strong ties to Washington, Argentina secured a twelve-month extension on a five billion dollar portion of its currency swap agreement with China. The renewal is part of an eighteen billion deal originally set up to boost Argentina’s reserves and finance imports during hard times. Even though Milei has toned down his anti-China rhetoric since taking office, he still leans pro-US, leaving the door open to possible American credit support, though nothing is confirmed.

Since we’re on the topic of credit, the World Bank and the Inter-American Development Bank, or IDB, have thrown their support behind Argentina’s economic overhaul with new funding packages. The World Bank pledged twelve billion dollars over three years, aiming to back public and private sector reforms, with immediate funds set aside for upgrading tax systems, improving education, and building infrastructure. Meanwhile, the IDB committed ten billion dollars, split between state-run projects and private investments.

Amid all of this, Argentina’s top union leaders from the CGT, the country’s largest labor union, called the general strike on Thursday the 10th a major victory, marking the third large-scale protest against Milei’s economic agenda. Leaders criticized the government’s austerity push, saying it’s shrinking real wages and hitting retirees and low-income groups the hardest. The union reaffirmed its stance: Argentina can’t keep letting prices rise while wages lag behind. The government brushed off the protest, saying it was driven by political interests from union leaders linked to previous governments.

Meanwhile, the northeastern Santa Fe province kicked off the election season. Maximiliano Pullaro, the current Santa Fe Governor, scored a solid win, leading the vote to elect delegates for a long-awaited provincial constitutional reform. Pullaro’s coalition, which is backed by the Unión Cívica Radical, the PRO and socialists, beat the Peronists by nearly twenty points, while Milei’s La Libertad Avanza trailed in third.

As the local elections in Buenos Aires City get closer, some players are making their moves. Manuel Adorni, the presidential spokesman, announced he’ll step down in December after running for a seat in Buenos Aires City’s Legislature. Adorni brushed off criticism about balancing his campaign and government role. He took aim at Mauricio Macri’s PRO party, calling it outdated, and praised Milei’s leadership as a fresh alternative.

If you have kids under eighteen, you may want to hear this. The government just opened up applications for the twenty twenty-five Education Vouchers program. Starting on the 21st of April and running through the 16th of May, families with kids enrolled in private schools that get at least 75% of their funding from the state can apply through the Mi Argentina app. To sign up, parents need to fill out a form with the child’s school info, grade and level of education—and the school has to confirm that the student is actively attending. The voucher works like a subsidy, helping families cover school expenses.

And to close this edition, the Argentine artists CA7RIEL and Paco Amoroso took the stage on The Tonight Show Starring Jimmy Fallon, bringing their unique fusion of trap, pop, and hip hop to a massive audience. Over the years, they’ve teamed up with major names like Tini Stoessel, Lali Espósito, and Bizarrap, but the performance marked a major moment in their international journey.

Aaand that’s it for this week! Thank you for joining us!

Did you know that the Rorshok Argentina Update is just one of many? We’ve got country updates, and non-county updates, including the Arctic Update, about the area north of the Arctic Circle, the Multilateral Update, about the world’s major multilateral institutions, and the Ocean Update, about the 70% of the world covered in salt water.

To check out the full list of updates, follow the link in the show notes!

¡Nos vemos la próxima semana!