This was announced by the Central Bank of the Argentine Republic (BCRA). The dollar’s fluctuating exchange rates are updated based on inflation and that it will launch a reserve building program.
The regulation will change from January 1, 2026 “The upper and lower bounds of the exchange rate fluctuation will change every month at the rate corresponding to the latest monthly inflation data from INDEC.”
In a statement, Central argued that the change is due to the fact that “the sliding rate of the bands is not adjusted for inflation in the United States.”the band cap increases in real terms over time.”
The Central Bank is changing the method of calculating the value of the official dollar
“The flexible exchange rate bands will continue to serve the function of limiting the risk of extreme movements.” and abruptly in the exchange rate,” they added.
Since March 2025, in accordance with the agreement with the International Monetary Fund, a system of updating the flexible bands has been introduced with an increase of 1% for the upper band and a reduction of 1% for the lower band.
Accumulation of reserves
On the other hand, it was also announced that from the first day of 2026 a “Consistent international program to build reserves.” In this sense, they pointed out that this program will be based on the demand for money and liquidity in the foreign exchange market.
Regarding money demand, the BCRA will take into account the growth and remonetization of the economy in 2026. The BCRA’s baseline 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 by purchasing $10,000 million subject to the provision of balance of payments flows.
“An additional increase in money demand of 1% of GDP could increase purchases to $17 billion, dependent on the provision of balance of payments flows without creating inflationary pressures,” the central bank described.
Regarding the liquidity of the foreign exchange market: The daily execution amount is adjusted to a 5% participation the daily volume of the foreign exchange market.
“This operational flexibility is in response to the observation that the volume traded daily in the foreign exchange market is subject to very large fluctuations. For example, in recent weeks the volume has been reduced by a third, from an average of $600 million per day to an amount of around $200 million (net of repo transactions).”
In addition to operations in the Free Exchange Market (MLC), the BCRA may conduct block purchases “which could otherwise adversely affect the orderly functioning and stability of the market.”
LM
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