Economy Minister and presidential candidate Sergio Massa said that he will eliminate currency restrictions at the end of 2024 if he wins the November 19 run-off election.
A strong expected harvest and lower debt payments than in 2023 would bring Argentina the dollars it needs for him to make the change, the candidate said in an interview on TV channel LN+ on Sunday night. The currency restrictions are known in Spanish as the cepo.
“We will eliminate the cepo when 2024 ends and we have enough dollar reserves for trade to flow freely, while also not having to strain our reserves,” Massa said.
The minister said that “next year will be good [because] exports may be very good” and there will be “low levels of debt maturities” in 2024. He continued that Argentina’s repayments to the International Monetary Fund will be around US$5 billion and maturities to private bondholders will be lower than in 2025.
Severe drought devastated harvests of key commodity crops such as soybeans in 2023, slashing Argentina’s export income by some US$20 billion. Early forecasts indicate an improvement in 2024, but with harvest season several months away, it is too soon to say for sure how the countryside will fare.
Lifting currency restrictions was one of the main campaign promises of right-wing candidates Javier Milei, who will compete against Massa in the November 19 run-off, and Patricia Bullrich. However, Massa had left it out of his campaign promises until now.
Currency restrictions have been in place, on and off, for the past decade, through former Presidents Cristina Fernández de Kirchner and Mauricio Macri’s governments. Currently, individuals can only buy US$200 per month at the bank. Many are excluded from purchasing them because of an extensive list of conditions that blocks access to dollars to people who receive government welfare or energy subsidies, among others.
Massa also said that his government would not devalue the peso after the run-off, like the 22% devaluation applied after the primaries in August. “We have an established agreement with the IMF that says that on November 15, after the run-off, the crawl will start,” he added, referring to the policy of micro-devaluations of the peso against the dollar known as crawling peg. The exchange rate has been fixed at AR$350 to the dollar since August. “The first day of the crawl, the dollar price will increase by three pesos.”
Massa added that in November, the IMF will investigate the capital flight that followed the US$45 billion loan Macri signed with the multilateral institution in 2018.
“The IMF will send a commission to Argentina and they will conduct a revision of the 66% [of the loan] that, according to the National General Audit Office, wasn’t used to finance hospitals, schools or pursue economic stability, but rather for financing investment fund payments.”