The International Monetary Fund (IMF) said that Argentina remains “firmly on track” in its eighth review of the economic program, but stressed that the country should devalue its currency faster and lift exchange controls.

The staff report, published on Monday, examined the application of the Fund-mandated economic program in the first three months of the year and enabled a disbursement of around US$800 million. 

Although the Fund’s staff concluded that Argentina met all the criteria with margins, it requested that the government improve the “quality of fiscal adjustment” and “scale up social assistance to protect the most vulnerable” to ensure that austerity measures do not “disproportionately fall on working families.”

Several points in the staff report contradict what the government has announced in terms of economic policy. For example, the staff report outlined that the administration would eliminate the 80:20 preferential export scheme in June, which allows exporters to sell 80% of their dollars in the official market and 20% at the blue-chip swap rate market.

However, last week Economy Minister Luis Caputo said in a post on X that the scheme, also known as “dollar blend,” would remain untouched. He also said that the 2% monthly crawling peg (the peso devaluation rate) would not be changed, although the report said the government would devaluate the currency quicker.

“While the fixed rate of crawl has helped to anchor inflation following the large step devaluation, the authorities will adjust foreign exchange policy over time to move more flexibly,” the staff report said.

According to the report, Argentine authorities committed to unwinding the foreign exchange restrictions collectively known as the cepo and said that they are developing a framework for “a conditions-based easing” of the controls.

In the previous review, the government was more specific and said they had promised to lift the cepo this year, with a roadmap to do so in June. However, a joint statement by the Economy Ministry and the Central Bank published last week said that it would only lift the cepo if doing so would not risk its progress in fighting inflation and accumulating reserves, and specifically said it would not give specific dates.

Last week, Economy Minister Luis Caputo said the government was negotiating a new program with the lender to obtain fresh funds, which it would use to lift the cepo.

The government also committed to eliminating the PAIS tax, imposed on all transactions in U.S. dollar, before the end of the year. The PAIS tax, which Caputo raised from 7.5% to 17.5% last year, currently collects 1.5% of Argentina’s GDP. Last week, Caputo promised to undo the increase if the government’s flagship Ley Bases bill gets approved.

The government also promised to unify the exchange rate “as conditions permit” to transition into a new monetary regime called “currency competition,” without offering further details on how it would work.