Javier Milei proposed modifying the Organic Charter of the Central Bank to make its sole mandate to control inflation, eliminating the objectives of employment and economic development. Former presidents of the BCRA criticised the proposal.
The Argentine president, Javier Milei, has put forward a reform of the Organic Charter of the Central Bank of the Argentine Republic (BCRA) that would limit its mandate to a single objective: price stability. The proposal was launched during a lecture at the Faro Foundation and has reopened the debate on the role of the monetary authority in the country's economy.
Currently, the BCRA has a multiple mandate since the 2012 reform, which includes, in addition to monetary stability, promoting economic development with social equity, fostering employment, ensuring financial stability, and sustainable growth. According to Milei, this multiplicity of objectives has contributed to the inflationary chaos that Argentina has suffered for years.
Criticism from former BCRA presidents
The proposal quickly received responses. Mercedes Marcó del Pont, who presided over the BCRA from 2010 to 2013, described Milei's ideas as “absurd and unachievable” in statements to the press. The former official argued that the president's focus on interest rates and the money supply to solve inflation is “short-sighted” and that the government has already managed to reduce inflation through recession, wage contraction, and import liberalisation.
For his part, Miguel Ángel Pesce, who led the BCRA during Alberto Fernández's presidency (2020-2022), labelled the initiative as “retrograde and dangerous.” Pesce pointed out that Milei's project aligns with the demands of the International Monetary Fund and seeks to eliminate tools such as temporary advances to the Treasury, which allowed financing public spending without resorting to the markets.
“If these two economic illiterates are complaining, it’s a good sign,” Milei responded on his social media account X, arguing that both of their tenures at the BCRA were disastrous and that their policies contributed to the economic deterioration.
The Peruvian model as a reference
Milei's proposal is inspired by the model of the Central Bank of Peru, whose autonomy has been enshrined in the Peruvian Constitution since 1993. In Peru, the central bank has a single mandate of price stability, multiple exchange rate regimes are prohibited, and the use of the dollar as legal tender is allowed, in a scheme of free currency competition.
Milei seeks to replicate that model in Argentina to prevent governments from financing public spending through monetary issuance, a mechanism that, according to him, has been the main cause of inflation in recent decades. The reform would involve eliminating the possibility for the BCRA to grant temporary advances to the Treasury and other financing tools for the public sector.
For readers interested in the Argentine economy, this proposal represents a radical change in monetary policy. If implemented, the BCRA would cease to have an active role in promoting employment and development, focusing exclusively on containing inflation. This could translate into higher interest rates and less intervention in the exchange market, but also greater predictability for investors and savers.
The debate is on, and time will tell if Milei can convince Argentine society of his vision. For now, the proposal has generated intense exchanges between the government and former officials, without a formal project being presented in Congress.
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