The President of Central Bank of the Argentine Republic (BCRA) responded to the criticism and assured that the Change in the exchange rate band regimewhich comes into force from January 1, 2026, This does not necessarily mean additional pressure on prices or an automatic rise in the dollar.
According to the monetary authority, the floating between the bands – which will adjust the upper and lower bounds of the official dollar quotation zone based on monthly inflation published by the INDEC from January – is designed to achieve the following: Improving the predictability of the foreign exchange market without directly transferring these fluctuations to consumer prices.
“The new regime does not create a mechanical relationship that increases inflation or the exchange rate,” the BCRA leadership said amid a context in which private forecasts showed an acceleration in inflation expectations in the latest Market Expectations Survey (REM).
The intention behind the action is to give more security for operators and companiesaccompany the development of domestic prices and enable a more stable environment for the accumulation of international reserves. In this sense, the aim is to adjust the band range on a monthly basis Adjust exchange rate policy to inflation dynamicsin order to avoid sudden jumps in exchange rates that could have a distorted effect on the real economy.
This change is part of a series of consolidation steps that the monetary authority is taking a program to remonetize the economy and strengthen its reserve positionwithout negatively impacting Argentinians’ cost of living or U.S. currency rates.
With this approach, the central bank seeks to balance price stability with a competitive exchange rate, thereby reducing the perception of the risk that greater exchange rate flexibility will automatically trigger a wave of inflation or an escalation of the dollar.
About The Author
