President Javier Milei announced on Thursday the details of his plan to reform the Charter of the Argentine Central Bank (in Spanish, BCRA), one of the cornerstones of his economic agenda for the coming months.

He made the announcement on national television, a platform he has used in the past to make economic announcements, such as the presentation of the 2026 budget proposal.

In his address, Milei explained the details of his five-point plan, which seeks to redefine the current role of the monetary authority.

First, the reform aims to establish a single mandate by stripping the BCRA of its current competing objectives: financial and monetary stability, full employment, social equity, and economic development. According to the president, the bank’s “sole responsibility” is preserving the value of the currency. 

To prevent future inflationary spikes, the reform will also strictly prohibit the Central Bank from financing government spending. The third point is meant as a safeguard for BCRA’s leadership against arbitrary political dismissal, meant to bolster institutional governance. 

Fourth, the initiative restricts the distribution of dividends derived from the Central Bank’s earnings. Finally, the administration intends to eliminate non-transferable bills entirely.

Milei explained that the initiative is part of a broader reform program that also includes the creation of a “fiscal anchor,” a mechanism that would trigger a government shutdown if Congress fails to restore balance to the public accounts.

Economist Carlos Pérez, from the center-right think tank Fundación Capital, told the Herald that any measure cutting off central bank financing to the public sector is “welcome because it is a key factor explaining the very high inflation that Argentina has always experienced.”

When Milei took office in December 2023, the quasi-fiscal deficit — the interest paid by the Central Bank for issuing its own securities to absorb pesos from the market, which constituted the main source of money supply — stood at around 10% of GDP.

Pérez described this decision as a “very helpful” tool in achieving the goal of bringing down Argentina’s inflation levels.

He compared the situation of recent decades — marked by rising inflation — to what happened in the 1990s, when the peso was pegged to the........

© Buenos Aires Herald