The International Monetary Fund (IMF) has made the first disbursement of the US$20 billion deal it struck with Argentina last week. A source in the Central Bank told the Herald that the payment totaled US$12.3 billion in Special Drawing Rights (SDRs, the lender’s currency).

On the same day, the Central Bank announced that foreign investors will be allowed to access the official exchange rate market, with a six-month minimum parking period.

After the disbursement, Argentina’s gross international reserves jumped from US$24.7 billion to US$36.8 billion.

Following the approval of the new program, Argentina has now received 43.1% of the total amount loaned by the IMF.

The deal included the change of the monetary policy and the partial elimination of the exchange rate restrictions, commonly known locally as the “cepo” (Spanish for “clamp”). The cepo forbade citizens from buying more than US$200 per month in the official market. On Friday, the government announced it would eliminate that cap.

On Monday, the dollar started to trade under a banded exchange rate scheme that allows it to float between AR$1,000 and AR$1,400. The official retail exchange rate jumped from AR$1,108 per U.S. dollar on Friday to AR$1,233.3 on Monday. On Tuesday, it closed at AR$1,233.99.

The government considered it a success, with presidential spokesman Manuel Adorni posting a picture to social media of the economic team celebrating the news.

Prices are expected to grow after the depreciation of the peso, although it remains to be seen by how much. Minister of Economy Luis Caputo stated that the announcements were not a “devaluation” but a “flotation.”

Market sources said the deal is positive for the country. Balanz, an Argentine brokerage, said that the agreement “represents a major step forward for Argentina” because the disbursements were “higher than expected,” contributing to “strengthen the Central Bank’s reserves, one of the main sources of uncertainty in the last weeks.” A report issued by Balanz on Monday said the deal “is accompanied by a more consistent and sustainable economic program,” and added that they expect the official exchange rate to move to a range between AR$1,200 to AR$1,300.

Pablo Repetto, head of research at the Aurum brokerage, said the deal was “more than what was expected” in terms of eliminating currency restrictions. “Having said that, the obsession with keeping a low exchange rate could be very counterproductive in the end,” he continued. “Because if everything is to reassemble the carry [trade operations], in August or September we will be worse than now.” However, he added that if the Central Bank started buying U.S. dollars, “we may be seeing another movie.”

Also on Tuesday, the Central Bank announced that it would authorize foreign investors to access the official exchange rate market “for the repatriation of their new investments.” Those investments will require a minimum “parking” period of six months.

The monetary authority stated that “the relaxation of these controls creates a regulatory environment more conducive to attracting and channeling a greater volume of investments into the domestic capital market”.

The Central Bank also said it would issue the fourth series of the BOPREAL bonds, which are centred around companies paying their commercial debts.

The new series will last three years, will be denominated in dollars, and may be subscribed in pesos. In the first instance, US$3 billion will be approved and awarded in successive bond auctions.