Given expectations for monetary policy the economic analyst Salvador Di Stéfano, known as “the guru of the city”evaluated the recent decisions of the Central Bank of the Argentine Republic and warned of an adjustment of the foreign exchange band regime will create greater flexibility.
According to Di Stéfano, this scheme “Ratifies gangs and intervention in extreme cases” and reflects a policy that aims to ensure that “the inflation local try to converge with that international inflation”.
The analysis is consistent with the official description of the BCRA’s monetary program for 2026, which states that “from January 1, 2026, the upper and lower bounds of the exchange rate float band will evolve in relation to the latest monthly inflation data reported by INDEC with a two-month lag,” with the aim of avoiding abrupt movements in the exchange rate and providing greater predictability to the exchange rate system.
In his column, Di Stefano highlighted the changes recorded in monetary aggregates between April 2024 and November 2025: the monetary base increased from 2.7 percent to 4.3 percent of the product, the M3 money supply increased from 14.5 to 16.7 percent of GDP, and credit to the private sector increased from 4.2 to 9.0 percent of GDP. “The intention is to purchase reserves and increase the monetary base to re-monetize the economy,” estimating that this measure could increase the monetary base up to 4.8 percent of GDP. This would mean purchases of reserves worth up to $10,000 million, and even $17,000 million in an expanded scenario.
The BCRA statement introduces a nuance to this strategy: the monetary authority explained that its reserve accumulation program will be in line with the money demand and liquidity of the foreign exchange market and that “the daily execution amount will initially be adjusted to a proportion of 5 percent of the daily operated volume” in order not to affect the stability of the market.
Conclusion 1: New exchange rate bands do not mean devaluation
Di Stefano also stressed that despite the intention to buy reserves, “In no case does this lead to a devaluation of the currency symbol“, because the premise of the program is precisely “to balance local increases with international ones”. This objective is actually reflected in the BCRA’s official communication, which clarified that ““The floating bands will continue to serve the function of limiting the risk of extreme and abrupt exchange rate fluctuations.”.
The analyst has one Optimistic view of the evolution of the exchange rate after the adjustment of the system: Despite the seasonal decline in demand for pesos, which will occur in the middle of next month, it rejects the pressure on the exchange rate thanks to the Budget surplus, lack of money issuance, debt reductionArrival of dollars from abroad, good harvest and more exports from the energy sector.
Additionally, the analyst noted that the new design “satisfies the IMFwhich advocated a reserve accumulation format.
On this point, the BCRA confirmed that it will continue the “gradual normalization of bank reserves policy,” a process that will be part of the monetary balance and that will be “carried out in a manner consistent with price stability and the recovery of financial intermediation.”
Di Stefano claimed that “none of the concerns expressed by the government regarding money issuance, exchange rates and interest rates have been reduced.” He added that the monetary system aims to “adjust the currency supply to public demand” to avoid “a.” Excess money that hinders the reduction of inflation“.
In its official statement, the BCRA stated that it “will maintain a contractionary monetary stance with respect to its estimate of the base curve of money demand as long as observed inflation remains above international inflation.”
Conclusion 2: “Much ado about nothing”
Based on the Market Expectations Survey (REM) forecasts, Di Stefano explained that the new bands are expected July 2026 they would locate the tmade for about $1,736the base at $800 and the middle of the band at $1,268, differences that show in their assessment that “the variation is not very significant in terms of price” compared to the previous formula of a fixed monthly adjustment of 1 percent.
Di Stefano concludes: Although the BCRA announced a different scheme – and with the express intention of buying international reserves and giving the financial system more liquidity to finance the private sector – “the bands are changing, but not that much.”
And then add: “Lots of noise, little crazinessYes, Everything will remain the same and we will accumulate reserves as long as there is no inflationary effecteither”.
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