Liliana Franco The International Monetary Fund (IMF) has warned of weaknesses in Argentina’s external position in an analysis of the nation’s economy in its latest External Sector Report, which evaluates external positions worldwide.
Argentina’s position in 2024 “was weaker than the level implied by medium-term fundamentals and desirable policies,” the report read. “Economic fundamentals have improved substantially since end-2023, but net international reserves remain critically low and sovereign spreads, while down sharply, are still elevated.”
The IMF’s analysis is that the average real exchange rate remained virtually unchanged in 2024 compared with 2023, since a major correction in December 2023 was followed by appreciation of over 40% during the first quarter of 2025, almost reaching 2017’s highs.
“As of May 2025, the [real exchange rate] was generally unchanged relative to the end of 2024 levels, in the context of the adoption of a new monetary and FX regime and the weakening of the US dollar,” the report reads.
The IMF’s assessment suggests that the exchange rate gap, or delay, was between 6-18% in 2024. This implies a gap of 15-25% by the end of this year.
Private studies in Argentina place some caveats on these numbers. It’s estimated that, after the dollar’s recent jump against the peso and the U.S. currency’s depreciation in the international market, the real multilateral exchange rate has improved by around 16% this month.
According to the Fund, “the recent transition to a more robust monetary and FX regime (moving from a crawling peg to a flexible exchange rate within relatively wide bands) allows for a more market-determined exchange rate, although tight macroeconomic policies remain necessary to deliver a strong trade balance and reserve accumulation.”
Argentina’s international reserves
After bottoming out at negative US$11 billion, the country’s net international reserves grew during 2024, the report notes, warning that accumulation has been more difficult since mid-2024. By the end of March 2025, the figure sat at negative US$6 billion.
“The reserve situation has stabilized since implementation of the new program and establishment of new exchange rate bands in mid-April,” the IMF wrote. However, reserve coverage remained “inadequate” at around 23% of the necessary level by the end of 2024, according to the organism’s calculations.
This improved following a US$12 billion disbursement in mid-April as part of Argentina’s new agreement with the IMF. However, private calculations suggest the country still only has around half of the reserves it needs.
“Early efforts are essential to rebuild reserves, while allowing for greater price discovery and FX purchases to meet FX debt service obligations,” the IMF concluded.