Argentina Senate approves Milei’s 2026 budget, clearing fiscal path and IMF ties
Argentina’s Senate approved President Javier Milei’s 2026 budget in a 46–25 vote, marking his first major legislative victory since taking office in 2023. The budget approval strengthens Argentina’s position with the IMF and aims to help deliver a fiscal surplus as the government negotiates a roughly $20 billion IMF program. Lawmakers plan to review Milei’s labour reform next year; the bill would also allow the administration to arrange foreign debt operations subject to congressional approval. Finance Minister Luis Caputo said no new overseas bond sales were planned for January despite roughly $4.5 billion in bond payments due. Separately, official data showed Argentina’s economic activity rose 3.2% year-on-year in October — below prior estimates — while monthly activity slipped 0.4%. Market volatility around the midterm elections and a roughly 5% peso depreciation in October have increased financing pressures despite a $20 billion currency swap line arranged by U.S. officials.
Neutral
The budget approval reduces political uncertainty and improves Argentina’s negotiating position with the IMF, which is supportive for macro stability — a neutral-to-mildly positive signal for risk assets including cryptocurrencies tied to emerging-market sentiment. However, near-term fiscal tightening, unresolved debt maturities (~$4.5bn) and currency volatility (peso -5% in October) maintain downside financing risks. Historically, credible fiscal reforms and IMF support can stabilize markets over months, potentially restoring risk appetite; conversely, abrupt austerity or failed reforms have previously triggered capital flight and local-asset sell-offs. For crypto traders: expect limited immediate directional impact on major global crypto (BTC, ETH) — moves likely driven by broader risk-on/risk-off flows and USD/liquidity conditions rather than Argentina-specific policy alone. Short-term: possible increased volatility in LATAM-focused tokens or USD/ARS-sensitive instruments if local stress reappears. Long-term: successful fiscal consolidation and IMF cooperation would be mildly bullish for risk assets by reducing tail-risk; failure would be bearish due to renewed instability and capital controls.