Official sources admit that closing the year around 25% inflation would also be an acceptable result compared to the starting point. January's 2.9% was nearly double the 1.5% recorded in May of last year, but the government downplays the data by noting that core inflation—excluding regulated and seasonal prices—was 2.6%. While the dollar retreats and inflation still runs above the pace of depreciation, the real multilateral exchange rate has fallen by nearly 10% since late October, reducing external competitiveness. The market speculates on new measures to ease currency controls, especially for companies, taking advantage of the current dollar stability, although no official confirmations have been made so far. With inflation still decelerating and the exchange rate on the decline, the government is navigating a delicate balance between price stability and competitiveness, while betting that the exchange rate anchor will re-establish itself as a central pillar of its economic program. In the economic team led by Luis 'Toto' Caputo, they believe the currency's retreat will allow it to resume its role as an anti-inflationary 'anchor,' a function that, according to officials, weakened during the second half of 2025 amid the turbulence before the legislative elections. During that period, the jump in the exchange rate until October eventually translated into prices with some lag. This key indicator for measuring the relative position of the Argentine economy against its trading partners is once again at levels that spark debate about the sustainability of the scheme. Thus, a phenomenon that the government itself had highlighted months ago—the low pass-through of the dollar to prices—is partially fading. All eyes are on April, when the government expects monthly inflation to break below 2% if no disruptive factors arise. However, they recognize that tariff adjustments will continue to exert pressure on the general price level. The main cost of the exchange rate strategy is the real appreciation of the peso. The latest Market Expectations Survey raised the inflation projection for 2026 to 22.4%, although the market acknowledges that this estimate is already outdated after January's data. Now, the phenomenon seems to be reversing: the retail dollar has fallen from 1,490 pesos at the beginning of January to 1,425 in the latest rounds, while the wholesale rate was on the verge of breaking below 1,400. The official expectation is that this drop of over 4% since the start of the year will impact a deceleration of the general index in the short term. Buenos Aires - February 11, 2026 - Total News Agency - TNA - The national government is once again betting on the exchange rate as a central tool to contain inflation, in a strategy that seeks to break the price inertia in the coming months, albeit at the cost of a new currency appreciation that is already impacting competitiveness. The January figure released by INDEC, which marked a 2.9% increase, coincided with the lowest level of the dollar so far this year. The sharp increase in food and beverages (4.7%) was largely due to specific hikes: meat rose again by more than 5.5%, chicken by nearly 9%, and some fruits and vegetables registered extraordinary increases, such as tomatoes, which jumped by up to 90% due to seasonal factors. In the Ministry of Economy, they maintain that some of these increases could be reversed in February, which would allow the index to settle below 2.5% in the coming months. Caputo himself recently attributed the inflationary surge to the 'kuka risk,' referring to the political uncertainty that pressured the dollar last year. If this trend consolidates, they would seek to deepen the decline in the second quarter. However, the annual scenario looks more complex. After a meeting with President Javier Milei, Central Bank head Santiago Bausili and Minister Caputo anticipated that 'there will be news,' without providing details. Over time, it has become evident that the pass-through remains significant, albeit with lags. In parallel, expectations for potential economic announcements are growing.
