Argentine Chamber of Deputies to Vote on Central Bank Charter Reform

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The Argentine Chamber of Deputies scheduled a vote for August 26 on a reform of the central bank’s charter, which aimed to limit the bank to a single mandate of preserving currency value or price stability. The bill, which passed through finance and budget committees with 42 signatures from La Libertad Avanza and allied blocs, proposed an outright ban on the bank financing the Treasury and the winding down of non-transferable Treasury notes. As of August 20, the governing bloc had not yet secured the quorum necessary to proceed with the session. This legislation functioned as a structural change designed to eliminate the central bank’s historical practice of funding government spending.

Consequences

If passed, the reform would strip the central bank of its ability to use reserves for public spending and remove discretion by eliminating its broader mandates for employment and development. The institutional permanence of these changes would be bolstered by a provision requiring a two-thirds majority in both chambers to remove bank authorities, potentially insulating the policy from future government changes.

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