BCRA Leader Vows No Easing Until Inflation Converges Globally
On Wednesday, August 19, the head of Argentina's central bank (BCRA), Santiago Bausili, spoke virtually at a forum organized by the Fundación FIEL, a prominent economic research institute. He emphatically ruled out relaxing monetary policy to spur growth, stating: “We will maintain the contractionary bias of monetary policy while inflation does not converge with international levels.” This is a key signal for foreign investors and observers: Argentina remains committed to fighting persistently high price increases, even if it means keeping economic activity cool.
Bausili pointed out that the inflation spike seen in the first quarter of this year “turned out to be temporary” and that underlying inflation (which excludes volatile items like food and energy) is now comparable to levels from 2017. He admitted that the disinflation process would be gradual, but he remained confident in its continuation.
August Inflation Expected Below 2.1% (July) and Likely Under 1.9% (June)
Bausili described himself as “quite optimistic” about the path of prices in August. According to high-frequency monitoring data (weekly price checks in supermarkets and wholesale markets), the August consumer price index (CPI) “will obviously be lower than July and probably also lower than June”. In July, inflation jumped to 2.1% (seasonal effect from winter holidays), while June saw 1.9% according to INDEC (Argentina’s national statistics agency).
The market consensus, as captured by the REM (the central bank’s own market expectations survey), places August inflation at 1.8%. That aligns with the forecasts of private consultancies like Analytica, LCG, and EconViews, which track food and beverage prices in the first weeks of the month. If confirmed, it would be the lowest monthly inflation reading in Argentina since 2020.
Monthly Inflation (CPI) – Argentina
| Month | Rate |
|---|---|
| June 2026 | 1.9% |
| July 2026 | 2.1% |
| August 2026 (projected) | ~1.8% |
Monetary Strategy: Balancing Liquidity and Exchange Rate Stability
Bausili outlined that the central bank will manage the money supply and overall liquidity carefully to avoid fueling currency depreciation or inflation. Short-term interest rates (interbank cauciones) have recently spiked to around 30% per year in daily operations, but Bausili stressed that the priority is to keep interest rates stable while gradually recovering money demand (people holding pesos instead of dollars).
Reserves Buying Program Continues – Already USD 13.664 Billion
The central bank president confirmed no plans to end the dollar-buying program (which uses the budget surplus to buy U.S. dollars in the market). Up to August 18, the program had accumulated USD 13.664 billion in reserve purchases, far exceeding what the market expected, as Bausili noted. This boost has improved the central bank’s balance sheet, thanks to the fiscal surplus that Argentina has maintained for over a year.
Additionally, he pointed out that Argentina is no longer a monoproduct economy: energy exports (oil and gas) are bringing in steady daily revenue. “Oil is produced every day”, he remarked, in contrast to agricultural exports which are seasonal.
Defense of Dollar-Denominated Loans for Non-Exporting Companies
Bausili also defended the recent decision to allow companies that do not export goods to take out loans in dollars (previously, this was limited to exporters). “Argentines save in dollars, and it is essential to find channels to transform that savings into investment”, he said. The measure aims to channel dollar savings into productive projects. However, he stressed that the central bank does not expect a “boom of credits” and that the financial system understands the exchange-rate mismatch risk, recalling the 2001 crisis. The measure could benefit especially real-estate developments and small and medium enterprises (PYMES) that have ties with external markets. Authorities set a cap that such loans cannot exceed 15% of a bank's total deposits.
Real Economy: Mixed but Encouraging Signs
While the overall economic activity is growing, Bausili acknowledged that expansion is “heterogeneous”. Energy, mining, and agriculture are doing very well, while industry, construction, and commerce are lagging. However, he sees the beginning of a positive spillover effect: “We are starting to see that the sectors that are doing better begin to have an impact on the most delayed ones.” He also stressed that this growth occurs in a framework of fiscal and monetary balance, making it “more sustainable in the medium and long term”.
Reform of the Central Bank Charter: 'Ambitious Institutional Outlook'
Finally, Bausili praised the proposal to reform the BCRA's Charter (its founding law) as “a project that transmits an institutional ambition very attractive for Argentina”. The subject hadn't been in public debate for more than two decades. He added that market expectations are anchored: the median forecast in the market expects inflation to fall to around 30% by 2026 and around 20% by 2027, he highlighted. This marks a significant step in the country’s long-term anti-inflationary effort, and a departure from past central bank policies.