The decision marks the beginning of the so-called Phase III of the government's economic program and comes after the release of November's inflation data and growing market pressures to strengthen the central bank's external position. According to the entity led by Santiago Bausili, the ceiling and floor of the exchange rate band will no longer adjust at a fixed monthly rate of 1% and will instead evolve based on the latest inflation index reported by INDEC. With this change, the scheme's ceiling will be set at around 1,556 pesos, giving the regime greater flexibility and reducing the need for defensive interventions with foreign exchange sales. The Central Bank emphasized that the modification does not imply abandoning the managed float scheme adopted after the removal of currency controls last April, but rather an adjustment to align it with the disinflation and remonetization process. If money demand were to grow an additional percentage point of GDP, purchases could scale up to $17 billion without the need to apply sustained sterilization policies. The new strategy also includes tools to manage peso liquidity, such as managing bank reserves and using instruments like LECAP, in line with a scheme that rules out the return of a traditional policy interest rate as a nominal anchor. According to official sources, the measures have the backing of the International Monetary Fund, whose next mission will arrive in the country in February, in a context where the government is set to miss the net reserve accumulation target agreed upon for this year. With this shift, the Central Bank seeks to reinforce the consistency of the economic program, provide greater predictability to the exchange rate regime, and advance the reconstruction of reserves, one of the main inherited challenges and a key factor for macroeconomic stability leading into 2026. Under this base scenario, the Central Bank estimates it could purchase around $10 billion in 2026, which would allow raising the monetary base from 4.2% to 4.8% of GDP by year-end. The Central Bank noted that the monetary normalization process initiated after the pre-election turmoil is proceeding in an orderly manner. The announcements were well-received by the financial market. This Monday, an operation of this type allowed for the addition of $322 million, pushing reserves above $42 billion. In this new phase, the BCRA does not rule out continuing to use such tools. In this sense, Bausili stated that allowing the bands to follow inflation “gives the regime degrees of flexibility” and avoids unnecessary tensions in the foreign exchange market. In parallel, the monetary authority confirmed the implementation of a reserve purchase program that had been anticipated in general guidelines. Buenos Aires, December 16, 2025 - Total News Agency-TNA- The Central Bank of the Argentine Republic announced a significant shift in its exchange rate and monetary strategy by confirming that, starting January 1, 2026, it will modify the mechanism for updating the dollar's floating bands and launch an active program for the accumulation of international reserves. The Central Bank president himself explained that the percentage will not be rigid and will adapt to the conditions of each day to avoid distortions in moments of low trading volume. Until now, the Central Bank had remained largely on the sidelines of the foreign exchange market, with the premise of intervening only when the exchange rate reached the floor of the band. Sovereign bonds recorded average gains of 1.5%, and the country risk breached the 600 basis points threshold, reflecting an improvement in expectations. The BCRA will enter the market to acquire foreign currency with a guiding participation equivalent to 5% of the daily volume of the wholesale market, a parameter designed to balance the impact of purchases in a market characterized by strong liquidity fluctuations. However, the need to meet significant debt maturities and rebuild reserves led the Treasury to make bulk purchases in recent weeks, agreed upon outside the unified and free foreign exchange market. Technically, the update will be based on T-2 data, meaning that from next January the bands will move at a 2.5% monthly rate, in line with November's inflation. The authority insisted that reserve accumulation does not necessarily imply upward pressure on the exchange rate, and recalled that in the last two years, remunerated liabilities were eliminated and more dollars were purchased than in previous administrations, although those resources were absorbed by debt payments and the closure of external financing. The conceptual axis of Phase III is the expectation of higher money demand and an economy remonetization process.
