President Javier Milei on Sunday outlined his proposed overhaul of Argentina’s Central Bank, which is centred on strict monetary discipline and greater institutional independence – a reform he regards as a cornerstone of the second half of his Presidency.
In an opinion piece published in the Clarín national newspaper, Milei set out the main pillars of the proposed reform of the Central Bank (BCRA), arguing that the institution, whose primary mission was supposed to be preserving the value of the national currency, had not only failed in that task but had performed so poorly that its very existence should be debated.
“The obscenity of its record makes it unavoidable to debate whether a Central Bank should exist at all and, if so, under what rules it should operate,” Milei wrote.
The article comes ahead of a visit to Argentina by International Monetary Fund (IMF) Managing Director Kristalina Georgieva.
Argentina remains the IMF’s largest debtor. The IMF has expressed support for the proposed reform, describing it as an important step towards helping Argentina regain access to international financial markets and credit.
The bill, which is expected to be submitted to Congress shortly, seeks to amend the Central Bank’s charter by restoring its primary mission of preserving the value of the currency, Milei said.
Another key provision would categorically ban Central Bank financing of the state, including the national government, provincial administrations and municipalities, as well as prohibiting purchases of national government debt in the primary market.
The proposal would also strengthen protections for the Central Bank’s leadership. The removal of the governor or members of the board would become more difficult, requiring a two-thirds majority in both houses of Congress.
“Experience shows that every abrupt dismissal has been linked to attempts to secure a more lenient monetary policy,” Milei argued.
Remaining true to his confrontational style, the President claimed that reforming the monetary authority, “together with the new fiscal rules … will put an end to 91 years of plunder, expropriation, impunity and decline, allowing us to make Argentina great again.”
Since taking office in December 2023, Milei has implemented sweeping fiscal austerity measures that have helped bring annual inflation down sharply, from 161 percent when he assumed office to the current 33.5 percent.
That shift, however, has weighed heavily on employment, industrial activity and consumer spending.
Milei sees the Central Bank reform bill as a key tool for finally defeating inflation by preventing excessive money creation.
– TIMES/AFP
