Bausili: Argentina's stabilization program yields early success
Santiago Bausili, President of the Central Bank of Argentina, highlighted early successes of the country's stabilization program at a presentation on April 29, 2026. He noted anchored inflation expectations, a stable exchange rate, and significant reserve accumulation.
Stabilization program shows early gains
President Santiago Bausili outlined the early successes of Argentina's stabilization program, launched in late 2023, aimed at reducing inflation and stabilizing the exchange rate.
Over the past two months, the program performed as designed: interest rates and volatility declined, inflation expectations remained anchored downwards, the exchange rate held stable, and the Central Bank of Argentina (BCRA) purchased more reserves than anticipated.
This dynamic fosters a virtuous cycle, extending planning horizons and encouraging forward-looking decisions, with early signs of recovery in lending and economic activity.
Bausili highlighted four pillars underpinning Argentina's robust external balance.
Cyclically, post-election dollar demand reversed.
The BCRA accumulated USD6.9 billion in reserves this year, easing foreign exchange restrictions.
Structurally, exports reached historical highs, driven by agriculture and a strong energy/mining outlook.
Fiscal discipline, with the elimination of the deficit, provides a structural safeguard for the balance of payments, contributing to a USD5 billion increase in gross international reserves.
Domestic prices and a new monetary framework
Bausili addressed the recent CPI debate, attributing price jumps to a temporary fall in money demand and relative price changes.
Monetary policy focuses on converging inflation towards international levels, preventing second-round effects from movements in key relative prices.
A significant milestone is that foreign exchange rate movements, despite regime modifications, had no impact on goods prices.
Argentina now operates under a free-floating exchange rate regime with a protective band ceiling.
Monetary policy in 2026 differs significantly, with the BCRA no longer carrying remunerated liabilities.
The monetary base has expanded, creating room for remonetization.
Market interest rates have declined, and the BCRA actively reduced short-term interest rate volatility.
The Treasury's coordinated participation in the liquidity market is an integral part of monetary policy conduct.
A new economic reality takes hold
The speech paints a picture of significant progress against historical challenges, particularly fiscal discipline and reserve accumulation.
While early signs of recovery are noted, the path to sustained growth remains contingent on anchoring long-term expectations and managing external shocks.
This marks a departure from past crises, offering a more robust, albeit still nascent, foundation for future stability.