The BCRA launches a new stage of the monetary program in order to consolidate price stability. The efforts of the monetary authority will prioritize achieving convergence between domestic inflation and international inflation levels.
Both the successful progress in the resolution of macroeconomic imbalances and the validation of the strength of the economic program—in the face of political uncertainty stemming from the mid-term elections—extend the planning horizon, creating favorable conditions for economic growth, re-monetization, and international reserve accumulation.
Monetary policy will aim to ensure that money supply aligns with the recovery in money demand, prioritizing liquidity provision through the accumulation of international reserves. Monetary programming will establish a consistent path for monetary aggregates that ensures compatibility between the disinflation process and the buildup of international reserves.
Summary of the main measures, which are developed in detail in the following sections:
– As of January 1, 2026, the ceiling and the floor of the floating exchange rate band will be adjusted each month according to the latest monthly inflation figure published by the National Institute of Statistics and Censuses (Instituto Nacional de Estadística y Censos, INDEC) (T-2, two periods before the current one).
– As of January 1, 2026, the BCRA will implement an international reserve accumulation program in line with the evolution of money demand and forex market liquidity. Under the BCRA’s re-monetization scenario, the monetary base is projected to increase from the current 4.2% to 4.8% of GDP by December 2026. This expansion could be met through the purchase of USD10 billion subject to the availability of balance of payments flows.
– An additional increase in money demand equal to 1% of GDP could raise purchases to USD17 billion, subject to the availability of balance of payments flows, without requiring sustained sterilization efforts.
– The daily operational volume of the international reserve accumulation program will be in line with the 5% share of the daily volume in the forex market. The BCRA may carry out block purchases that could otherwise risk the proper operation and stability of the market.
Context, recent developments and background of the monetary program
Macroeconomic stabilization was consolidated in 2024 on the basis of fiscal discipline, the end of monetary financing to the Treasury and the elimination of currency issuance associated with remunerated liabilities.
Since December 2023, the BCRA has adopted a monetary framework centered on the control of monetary aggregates and a streamlined interest rates scheme. This framework entailed the elimination of LELIQs and the initial adoption of the overnight repo rate as the sole policy benchmark rate. After the initial exchange rate adjustment, the 2% monthly crawl operated as a nominal anchor during the first stage of the program. These measures were supported by freezing the broad monetary base, thus contributing to anchor inflation expectations.
Over the past two years, the economic program has moved forward in the following areas:
(i) eliminating excess monetary issuance, as reflected in monetary overhang, price controls, and capital controls;
(ii) reducing restrictions related to price controls and interest rates that distorted the efficient allocation of resources;
(iii) lifting the foreign exchange clamp and restoring normal access to the forex market, with a positive impact on price and inflation expectations;
(iv) developing the interbank liquidity market, although significant distortions persist due to existing provincial taxes;
(v) restoring normal payment of private commercial debt linked to imports and eliminating monetary issuance contingencies (puts);
(vi) strengthening the BCRA’s balance sheet—by reducing more than 65% in the share of sovereign bonds in its gross reserve-related assets—and the removal of remunerated liabilities.
These fiscal and monetary policy advances marked a turning point and promoted the disinflation process. In April 2024, the annual inflation reached a peak close to 290%, reflecting indicators consistent with a hyperinflationary path. In November 2025, the annual inflation was 31.4%. More significantly, inflation expectations remain firmly anchored, anticipating a path of continued disinflation, as reflected in the latest REM from November 2025.
The sharp decrease observed in inflation over the past 18 months was consistent with the increased money demand. This growth in money demand enables a considerable real-term rise in monetary aggregates. The monetary base increased from 2.7% to 4.2% of GDP between April 2024 and November 2025, while M3 grew from 14.5% to 16.7% of GDP over the same period. At the same time, bank credit in pesos to the private sector rose from 4.2% to 9.0% of GDP, supported by the release of financial resources driven by sustained fiscal balance over 23 months.
This process was temporarily interrupted by the political instability that began in April 2025, leading to a collapse in money demand. This shock resulted in an unprecedented episode of portfolio dollarization and exchange-rate hedging.
Once the period of electoral uncertainty had been successfully overcome, the conditions were set to move forward to a new phase of the monetary program. This stage faces favorable conditions for economic growth, re‑monetization, and the buildup of international reserves.
Compared with historical standards, monetary aggregates could return, in the coming years, to a path of pronounced real growth without exerting inflationary pressures. Historically, the monetization of the Argentine economy (measured by the monetary base) ranged between 8% and 9% of GDP.
The regained access to international capital markets by the National Treasury to refinance its debts in foreign currency will allow international reserve purchases to accumulate on the BCRA’s balance sheet rather than to be used for debt settlements.
2026 monetary program
Exchange rate band regime: As of January 1, 2026, the ceiling and the floor of the floating exchange rate band will be adjusted each month according to the latest monthly inflation figure published by the National Institute of Statistics and Censuses (Instituto Nacional de Estadística y Censos, INDEC) (T-2, two periods before the current one).
Since the adjustment pace of the bands does not adjust in line with the U.S. inflation, the band ceiling increases in real terms over time. The exchange rate bands will keep limiting the risk of extreme and abrupt movements in the exchange rates.
Pre-announced reserve purchase program: Starting January 1, 2026, the BCRA will launch a program for the accumulation of international reserves consistent with two considerations:
(i) Money demand: The program is aligned with the BCRA’s estimates for economic growth and re‑monetization throughout 2026. Under the BCRA’s re-monetization scenario, the monetary base is projected to increase from the current 4.2% to 4.8% of GDP by December 2026. This expansion could be met through the purchase of USD10 billion subject to the availability of balance of payments flows. An additional increase in money demand equal to 1% of GDP could raise purchases to USD17 billion, subject to the availability of balance of payments flows without leading to inflationary pressures.
The BCRA will maintain a monetary policy bias to avoid sustained sterilization efforts as long as money demand evolves as expected. Should money demand fall short of projections, the BCRA will adopt the corrective measures it deems appropriate within the framework of the economic program.
(ii) Forex market liquidity: In order to promote the orderly functioning and stability of the forex market, the reserve purchase program will be compatible with the daily market liquidity. Initially, the daily operational volume will be in line with the 5% share of the daily volume in the forex market. This operational flexibility reflects the significant volatility observed in daily trading volumes. As an example, the volume fell, in recent weeks, to one third of its previous level—from an average of USD600 million per day to around USD200 million (net of repo transactions). In addition to the forex market transactions, the BCRA may carry out block purchases that could otherwise risk the proper functioning and stability of the market.
Enhancing communication: The BCRA will summarize the publication of its quarterly monetary policy report beginning in December 2025. This report will present the BCRA’s analysis of the domestic and international economic contexts, analyze inflation dynamics and prospects, and openly explain the rationale behind monetary policy decisions.
Normalization of minimum reserve requirements: The BCRA will continue making progress towards the gradual normalization of the minimum reserve requirements. Changes to reserve requirements will play a critical role in determining the monetary balance and will therefore be implemented in a manner consistent with price stability and the recovery of financial intermediation.
Operational implementation of the 2026 monetary program
The calibration of the monetary policy within the described framework will depend on the evolution of inflation, its interaction with economic activity, and the financial conditions shaping money demand. As long as inflation remains above international inflation, the BCRA will maintain a contractionary monetary bias compared with its baseline estimate of money demand.
The BCRA will continue using conventional and prudential tools for managing the amount of money derived from the reserve purchase program. Priority will be given to correcting potential monetary imbalances by means of:
(i) Open market operations, mainly through purchases and sales of National Treasury bills capitalized in pesos (Letras del Tesoro Nacional Capitalizables en Pesos, LECAPs)
(ii) Repurchase agreement operations (repos) involving LECAPs with financial institutions.
If necessary, minimum reserve requirements may be adjusted on a supplementary basis, ensuring that such changes remain consistent with prudential standards.
Repos with financial institutions will be arranged daily at the interest rate set out by the BCRA on the basis of the levels observed in the secondary market for LECAPs.
In a context of financial stability, the interest rate on operational liquidity stocks will aim to encourage institutions to lend their excess financial balances in longer-term instruments with positive real rates.
Repo transactions with the BCRA will be conducted during forex market operating hours and will not be automatic—a process known as the “sweeping” of institutions’ stocks.
The repo facility window will remain operational under the current restrictions on eligible amounts and maturities. The interest rate on repos will be set by the BCRA, applying an additional margin over the prevailing rate in the secondary market for short‑term LECAPs.
Allowing for the monetary impact of the Treasury’s financial programming, the BCRA will continue coordinating with the Ministry of Economy on the management of Treasury instruments and financial programming, to the extent that the BCRA’s monetary program—aimed at preserving domestic liquidity balance—remains unaffected.
The BCRA foresees a cyclical expansion in economic activity and credit to the private sector, driven by market-oriented incentives that promote investment, exports, and consumption. The BCRA will meet money demand through the international reserves purchase program after eliminating remunerated liabilities. In order to continue reducing inflation, the BCRA will maintain the contractionary bias of the monetary policy, ensuring that money supply grows at a slower pace than money demand.
