(Bloomberg) -- Wall Street expects the International Monetary Fund to lend Argentina as much as $20 billion in a new program that would mark another critical seal of approval for President Javier Milei’s austerity campaign. 

Banks including UBS Group AG, Morgan Stanley and $Bank of America Corp(BAC-N)$. see the potential loan including anywhere between $5 billion and $10 billion in disbursements for 2025, while Argentina doesn’t have to make principal repayments to the IMF until next year for its previous loan. In theory, that money would boost Argentina’s central bank’s reserves enough to eventually start lifting currency and capital controls. 

Investors are keeping a close eye on how Milei’s government intends to use the funds as well as how and when it’ll dismantle the controls. So far, the libertarian president has said his government would use IMF money to pay down the Argentine treasury’s debt with the central bank in an effort to clean up the monetary authority’s balance sheet. 

“There is potential for positive surprises in the deal’s magnitude and timing of disbursements,” Alejo Czerwonko, chief investment officer for Americas emerging markets at UBS, said Monday in a report. “We could see up to $20 billion, including $8 billion in new funds, covering both principal and interest payments to the IMF during the remainder of Milei’s term.”  

Negotiations between Milei’s government and the IMF appear to be nearing the final stages after the libertarian told Congress in a speech Saturday he will seek its support for the upcoming program “in the coming days” without providing specifics. It would be Argentina’s third IMF program since 2018, as the previous two accords failed to stabilize the crisis-prone economy. 

Although among the worst-performers in emerging markets so far this year, Argentina’s sovereign bonds rallied this week after Milei’s speech to lawmakers. Benchmark notes due in 2035 last changed hands Wednesday at about 65 cents on the dollar, according to indicative pricing data compiled by Bloomberg.

Money managers “may be underpricing the possibility that Argentina agrees to additional fiscal consolidation” as part of an agreement with the IMF, Bank of America strategists including Lucas Martin said in a Jan. 27 report to investors.

The country’s $44 billion aid program expired at the end of 2024 and principal repayments to the IMF don’t start until September 2026, which is why the Milei administration aims to seal a new deal this year. The IMF confirmed in December that talks on a new loan were underway after Milei opted against finishing the final reviews of the deal he inherited from his predecessor.

A new program would bring the president and his team closer to returning the South American nation to international capital markets after it reneged on sovereign debt payments in 2020, marking the ninth default in Argentina’s history. 

©2025 Bloomberg L.P.