The President of the Central Bank (BCRA), Santiago Bausiliassured this Monday that the implementation of the new monthly update scheme for the replacement bands, to which Reservation purchaseswill not produce any acceleration of the inflation and expected that There are no plans to ease foreign exchange restrictions that implies a complete disarmament of the Shares.
In a press conference, the head of the monetary authority said that starting from January, the upper and lower bounds of the official exchange rate will be updated according to the latest change data from the monetary authority Consumer Price Index (CPI) of the index. So far, both bands have adjusted in different ways to a fixed rhythm of 1% per month, but next month they will reflect a variation of 2.5%, for example, according to November CPI.
“Just because the ranges are adjusted for inflation does not mean that inflation will be higher or lower.. It gives the system a certain degree of flexibility. “We believe this is a contribution to reducing uncertainty in the future,” Bausili said. In this sense, he clarified that the new measures do not necessarily mean an increase in the price of the dollar.
As an example, the president of the BCRA pointed out that this Monday the Treasury bought $320 million in the foreign exchange market. As he explained, if this equivalent foreign currency offer had not materialized, it would have put downward pressure on the exchange rate.
The official premise is: The recovery in economic activity leads to higher demand for money, which would allow the central bank to accumulate reserves without creating exchange rate or inflation tensions.. In this system, purchasing foreign currency would mean issuing pesos that would be absorbed by economic agents themselves. However, Bausili acknowledged that there will be no predetermined path for this process and that the intervention will remain discretionary.
From the private sector, consultancy Equilibra viewed the announcements as positive, but warned that they would mean less emphasis on the original inflation target. “The ranges in which the exchange rate moves no longer move below the inflation rate, but start to align with previous inflation. So there is an element of inflationary inertia added“, he remarked.
It is worth remembering that inflation rose almost continuously in November for the sixth month – July and August were at the same level at 1.9%. The rise of the dollar in recent months, the increase in meat prices in the run-up to the holidays and the increase in tariffs for public services put a limit on CPI fluctuations, which will be difficult to overcome in the future.
Equilibra also highlighted the start of significant foreign exchange purchases by the BCRA as progress, although it was increasing Doubts about the feasibility of creating reserves. The report said the Treasury will need to raise financing or acquire dollars to meet hard currency maturities amid higher import payments and demand for savings. “It is likely that this will be the first step in exchange rate flexibility in 2026.” before the executive election process begins,” the adviser added.
When asked about this possibility, Bausili replied bluntly: “No changes are planned with regard to the foreign exchange restrictions in place today.”. The definition points to one of the main complaints of investors, business people and international banks.
Several of the current restrictions were detailed in the document summarizing the agreement’s initial review in August International Monetary Fund (IMF) for $20,000 million. The program, signed in April, included partial easing of stocks for people who can now buy dollars at the official exchange rate through the Home banking.
The main obstacles include the so-called “Cross ban”This prevents access to the official market for those who have managed CCL or MEP dollars in the last or following 90 days. Recently, these terms were shortened to 15 business days for individuals and remained at 90 business days for banks that purchased official currencies to underwrite the Treasury Department’s latest U.S. dollar bond offering.
The scheme too maintains restrictions on payments for the import of goods and services, with limitations on prepayment, 90-day waiting period for services between related parties and specific import bans on soybeans until the liquidation of exports.
In addition, restrictions still apply to Transferring profits and dividends abroad corresponding to periods before January 1, 2025, and for transfers of current income from non-residents.
After all, this is what the agreement with the IMF says Restrictions on the payment of interest and repayment of foreign debts, These include the requirement to settle funds in the local market, limitations on advance payments and the need for prior authorization from the BCRA to pay principal or interest to non-resident related counterparties.
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