President Javier Milei’s government announced on Monday that it will adopt a new monetary framework and adjust the peso’s trading bands as part of a broader plan to build up the Central Bank’s international reserves.
In a statement, the Central Bank (BCRA) said it will link the peso’s trading bands to monthly inflation. Argentina has operated a semi-floating regime for the national currency since April, when the government eased access to foreign currency.
Argentina currently allows the peso to trade within a strict set of bands, a policy that has helped rein in inflation. Analysts say, however, that it has also contributed to an overvalued peso that is weighing on the economy.
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