Country risk fell almost 5% after changes in the dollar’s fluctuating exchange rate bands were announced

The introduction of a system of exchange rate bands with monthly inflation updates led to a sharp improvement in financial indicators

12/15/2025 – 4:49 p.m

After the Central Bank of the Argentine Republic (BCRA) a new replacement belt schemeThe markets reacted positively. At the end of the round this Monday the Country risk recorded a significant decline and was in the 594 basis pointswhich represents a Decline of 4.8% compared to last Friday’s closing price.

The improvement in the indicator created by the bank JP Morgan reflects the greater confidence of investors in the roadmap presented by the monetary authorityin a context where the government is trying to consolidate exchange rate stability and strengthen the financial front.

How the new exchange band scheme will work

As reported by the Central Bank, the Central Bank stated in a press release: “From January 1, 2026 The upper and lower bounds of the exchange rate float band change each month at the rate corresponding to the latest monthly inflation data reported by INDEC.“.

“In order to consolidate price stability, The Central Bank of the Argentine Republic (BCRA) announces the start of a new phase of the monetary program. “The Monetary Authority’s efforts will give priority to the objective of achieving convergence of domestic inflation to the level of international inflation,” the BCRA statement said.

In this way, the system tries to avoid exchange rate lags or misalignments by providing an automatic adjustment that closely follows price movements. The aim of the measure is to make the foreign exchange market more predictable and to reduce volatility in the medium term.

The central bank announced details of its monetary program for 2026

Another notable fact is that Pre-announced reservation purchase program: “Starting January 1, 2026, the BCRA will launch an international reserve accumulation program that meets two considerations,” the BCRA said.

The demand for money

“The designed program is in line with the BCRA estimate for the growth and remonetization of the economy in 2026. The BCRA’s base remonetization scenario envisages an increase in the monetary base from the current 4.2% to 4.8% of GDP by December 2026, which could be provided through the purchase of 10,000 million US dollars, dependent on the provision of balance of payments flows. An additional 1% of GDP increase in money demand could boost purchases to $17 billionsubject to the provision of balance of payments flows without creating inflationary pressures,” he stressed.

“The BCRA will maintain a monetary policy stance that avoids sustained sterilization efforts as long as money demand develops as expected. In the event that money demand development turns out to be lower than expected, The BCRA will take such corrective measures as it deems appropriate in accordance with the economic program“added the statement.