FX.co ★ Argentine Peso Hits Fresh Record Low

The Argentine peso has depreciated to approximately 1,200 per U.S. dollar in the wake of President Javier Milei's drastic removal of long-standing capital and currency controls. This strategic shift, supported by a fresh $20 billion loan from the International Monetary Fund, with an immediate provision of $12 billion, seeks to stabilize the country's economic situation. The plan permits the peso to fluctuate within a managed band ranging from 1,000 to 1,400 per U.S. dollar. Although the initiative aims to attract foreign investment and enhance export capabilities by removing market distortions, the swift change has incited fluctuations. The peso fell by 10% on the first day of the new system, as the market adjusted to the elimination of artificial exchange rate supports. Despite the IMF loan strengthening the central bank's reserves and providing some protection against further devaluation, the currency's stability now depends on investor confidence in the government's broader economic reforms. The decreasing disparity between official and unofficial exchange rates indicates a trend towards normalization.