Argentina's Chamber of Deputies gave half-approval to a reform of the Central Bank's organic charter on Wednesday [1].
The measure represents a significant shift in the country's monetary policy by attempting to decouple the central bank from the government's fiscal needs. By prohibiting the issuance of unbacked money to cover deficits, the government aims to curb inflation and strengthen the institution's independence [1], [2].
The reform passed the lower house with 144 votes in favor, 102 against, and nine abstentions [3]. This "media sanción" means the proposal has cleared the first legislative hurdle and now moves to the Senate for final consideration [3].
President Javier Milei celebrated the result, signaling that the legislative battle is not yet over. "Ahora, a pelearla en el Senado," Milei said [2].
The proposed changes to the Carta Orgánica del Banco Central de la República Argentina focus on creating safeguards that prevent the bank from printing currency without corresponding reserves [1]. Supporters of the bill argue that this restriction is necessary to restore trust in the national currency, and stabilize the economy [2].
Opponents in the Chamber of Deputies expressed concerns over the potential impact of these restrictions on the government's ability to manage economic crises. Despite these objections, the administration secured the majority needed to advance the bill [3].
The bill now faces a potentially more difficult path in the Senate, where the government must secure a similar majority to turn the proposal into law [3].
“The reform passed the lower house with 144 votes in favor, 102 against, and nine abstentions.”
This legislative step is a core component of President Javier Milei's economic strategy to eliminate monetary financing of the treasury. If passed by the Senate, the reform would legally bind the Central Bank to avoid the inflationary practices that have historically characterized Argentine fiscal policy, though it may limit the state's flexibility during liquidity crises.
