Central Bank President Guido Sandleris announced March 15 that the Executive branch will submit, within a period of 15 days, a bill to reform the Bank’s Organic Charter in order to “strengthen the institutionality of monetary policy”. The reform will seek to clearly state the Bank’s mandate for ensuring price stability. It will also prohibit the Bank from financing the Treasury.

The bill is one of the commitments made by the Executive branch to the International Monetary Fund. However, during the IMF’s third review visit to Argentina in February, it transpired that the organization does not expect the law to be enacted this year.  Sandleris observed that while both elements of the proposed amendment are already enshrined in Central Bank policy, it is important that they be reflected in the Charter.

Sandleris also announced that in response to the inflation rate in February, the Monetary Policy Committee had taken four decisions to strengthen the control of the monetary base. It will extend the objective of zero growth of the monetary base until the end of the year, sustain the overcompliance achieved in February, eliminate the adjustment for seasonal variations scheduled for June and establish that the limits of the non-intervention zone may grow to 1.75% per month during the second quarter of 2019. The Central Bank authorities expect these measures to bring the monetary base target 10% below that originally set by the end of the year.