Buenos Aires, December 15 (NA) -- The Central Bank of the Republic Argentina (BCRA) announced that the dollar's floating rate bands will be updated based on inflation starting next January. According to the Argentine News Agency, the scheme will be modified as of January 1, 2026, and “the ceiling and floor of the floating exchange rate will evolve each month at the pace corresponding to the latest monthly inflation data from INDEC”. The entity led by Santiago Bausili communicated today the start of a new phase of the monetary program, with the objective of “achieving the convergence of domestic inflation to the level of international inflation”. Another point on which the Central Bank emphasized was the accumulation of reserves, where it committed to carry out “a consistent accumulation program”. In the same direction is the International Monetary Fund (IMF), which insists on the planned currency purchases under the program. “The successful progress in resolving macroeconomic imbalances and the validation of the strength of the economic program against the political uncertainty generated by the mid-term elections expand the planning horizon, creating favorable conditions for growth, the re-monetization of the economy, and the accumulation of international reserves”. In this sense and in accordance with the re-monetization phase leading up to 2026, the BCRA announced the measures it will implement next year. The focus will be on accumulating foreign currency. However, it was communicated that the new monetary policy will be carried out “according to the evolution of inflation, its relationship with the level of activity, and the financial conditions that determine the demand for money”. “While the observed inflation remains above international inflation, the BCRA will maintain a contractive monetary bias with respect to its estimation of the base trajectory of demand for money”. The floating rate bands scheme will change The financial entity informed that the ceiling and floor of the floating rate band will be updated monthly, based on the latest inflation data published by the National Institute of Statistics and Censuses (INDEC). “Since the pace of the bands' slide is not adjusted for US inflation, the ceiling of the band increases in real terms over time”, stated Santiago Bausili, president of the Central Bank. Additionally to operations in the FCL (Free Exchange Market), the BCRA will be able to carry out block purchases that could otherwise affect the proper functioning and stability of the market”. Bank Reserves In a less extensive section, the Central Bank informed the continuity it will give to the policy of bank reserves, where it assured it will continue with the “gradual normalization process”. “The impact of the modifications to the integration requirements will be a relevant factor in the determination of monetary equilibrium and, therefore, will be carried out in a manner consistent with price stability and the recovery of financial intermediation”.
