From Yahoo Finance: 2025-04-01 06:07:00

Argentina and IMF near $20 billion deal, but traders uneasy over peso’s future. President Milei aims to restore investor trust and reserves after overspending. Talks ongoing, but FX policy uncertainty led to $1.6B reserves drop. Market wary, seeking details on IMF program and currency controls since 2019.

Peso weakening fears cause reserves drain, credit spreads unaffected by IMF program details absence. Country risk index rises, investor confidence wanes, bonds and equities fall. Milei prioritizes reserve rebuilding, but doubt lingers on FX policy changes under potential IMF deal.

Central bank sells dollars to support peso, but reserves fall to $26B from $33B in January. Sentiment worsens as inflation and devaluation expectations rise. Analysts divided on future FX policy under IMF agreement, uncertainty remains over potential capital controls removal before midterms.

Reserves expected to keep declining without clear FX rate outlook. Uncertainty hampers reserve recovery, potential for currency structure changes under IMF deal. Lack of clarity on exchange rate poses challenges for reserve stabilization. Argentina faces uphill battle amid economic uncertainty and lack of reserves.

Read more: Argentina IMF deal advances fail to clear FX haze