The International Monetary Fund (IMF) has called on Argentina’s government to accelerate efforts to build up foreign reserves as part of its $20 billion lending program, warning that stronger buffers are essential to sustain market confidence and economic stability.
Speaking at a press briefing in Washington on Thursday, IMF spokeswoman Julie Kozack said the Fund had emphasized the need for quicker reserve accumulation during discussions with officials from President Javier Milei’s administration.
“In our discussion with the authorities, we have stressed the need to accelerate reserve accumulation efforts to better manage volatility and further strengthen market confidence,” Kozack said. “Our view is that the chosen regime needs to be consistent with strengthening international reserves and external stability, as well as ensuring strong and sustainable growth in the country.”
Her remarks come amid a growing debate among investors and policymakers over whether the Milei government should modify its currency policy — a persistent weak point in Argentina’s previous IMF programs. Since the program began in April, the government has maintained a controlled exchange-rate band that allows the peso to fluctuate within a set range.
Economy Minister Luis Caputo said on Wednesday that the administration remains committed to increasing reserves but noted that the targets were agreed upon before new financing options emerged to cover roughly $4 billion in bond payments due in January.
“We’ve managed to separate the financial side from the monetary side,” Caputo told a conference in Buenos Aires. “We now see reserve accumulation as a way to strengthen the central bank’s balance sheet. But it’s not that we need to accumulate reserves today to pay the January coupon — we are solving that financially.”
Argentina has struggled to meet its reserve targets in the IMF program, as the central bank has avoided large-scale dollar purchases that could inject more pesos into the economy and stoke inflation. While monthly inflation has slowed compared to past peaks, investor concerns over the country’s thin reserves resurfaced earlier this year after Milei’s party suffered a provincial election setback, triggering market turbulence.
However, following Milei’s political rebound in the October midterm elections, sentiment among investors has improved. Kozack said the government should seize the moment to strengthen its macroeconomic position.
“Recent improvement in market conditions does present a window of opportunity for the authorities to strengthen macroeconomic policies, entrench stability, and accelerate reserve accumulation,” she said.
The IMF is scheduled to review Argentina’s progress under the program in January, when it will assess whether the country has met its next reserve target.
