President Javier Milei confirmed that he will meet with the economic team today to define the details of the reform of the BCRA's Organic Charter, aiming to prohibit monetary issuance to finance the fiscal deficit.
The Argentine president, Javier Milei, has confirmed that this afternoon he will meet with his economic team to finalise the details of the reform of the Organic Charter of the Central Bank of the Argentine Republic (BCRA). The meeting, scheduled for 6 PM at the presidential residence in Olivos, will include the Minister of Economy, Luis Caputo; the Minister of Deregulation and State Transformation, Federico Sturzenegger; and the head of the BCRA, Santiago Bausili.
A reform to penalise unbacked issuance
Milei explained that the central objective is to explicitly prohibit monetary issuance to finance the Treasury, a practice he described as "a scam". In his statements, the president noted that the new regulation will include criminal penalties for those who "violate" the independence of the central bank. "Monetary issuance to financially assist the treasury is a scam. In fact, the Penal Code defines fraud. Fraud and counterfeiting currency are criminal offences," he stated.
The reform seeks to reverse changes introduced in 2012, during the presidency of Mercedes Marcó del Pont at the BCRA. At that time, the Kirchnerist government modified Article 3 of the Organic Charter, which previously established as its essential objective "to preserve the value of the currency", turning it into a multiple mandate that included "promoting monetary stability, financial stability, employment, and economic development with social equity".
The "shutdown" as a model for fiscal discipline
In parallel, Milei announced that the Government is advancing a mechanism to limit public spending: if the State budget is exhausted, spending cannot continue and state operations would stop, a system similar to the "shutdown" in the United States. "When you run out of budget, you cannot spend more and the State shuts down," the president asserted. This measure aims to reinforce fiscal discipline and avoid deficits that fuel inflation.
The president also linked the BCRA reform with other ongoing laws, such as those concerning the capital market, Fiscal Innocence, and insurance market regulations. "Everything is interrelated," he assured.
A 180-degree turn in monetary policy
The reform proposed by Milei represents a radical change from the policy of recent years. The modification of Article 20 of the Organic Charter in 2012 allowed the BCRA to finance the Treasury through temporary advances, a tool that, according to the president, was overused and fueled inflation. "We are starting to build the foundation on which we will repair 91 years of all the damage done to Argentines," Milei declared on the streaming channel Neura.
For investors and analysts, the reform is a sign that the Government seeks to stabilise the economy and attract foreign capital. However, some experts warn that the "shutdown" could generate uncertainty in the markets and affect the provision of public services. The economic team has the task of defining the final details, which are expected to be presented in the coming weeks.
This afternoon's meeting in Olivos will define the final format of the reform, which will then need to be approved by Congress. Milei is confident that the new regulation will lay the groundwork for a more solid and predictable monetary policy.
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