Reuters
[Source: Reuters]
Argentina’s President Javier Milei on Thursday announced plans to reform the central bank’s charter, a move aimed at strengthening the institution’s independence and restricting its ability to finance government spending, which his administration blames for decades of high inflation.
The reform, which requires congressional approval, is expected to win broad support from Milei’s libertarian allies.
The move would bring Argentina closer to international models where central banks operate with autonomy from elected governments.
“The reform puts an end to the scam of counterfeiting money to finance politics,” Milei said in a televised address.
It builds on one of Milei’s 2023 presidential campaign promises to curb inflation which has fallen from an annual rate of 211% in 2023 to around 30% projected this year.
His government argues Argentina’s recurring bouts of high inflation, currency depreciation and economic crises were driven by governments financing fiscal deficits through central bank money printing.
Milei has accused previous administrations of “looting” the institution to finance public spending.
Under the bill, the central bank would be prohibited from directly or indirectly financing the Treasury.
It would also change the rules governing the appointment, tenure, and removal of central bank officials to shield the institution from political pressure.
However, some analysts warned that because the central bank’s charter is governed by ordinary legislation, any changes could eventually be amended or reversed by future governments and legislative majorities.
