From closing the central bank to reforming it: Milei's shift on monetary authority

Argentine President Javier Milei announced a bill on Thursday aimed at transforming the central bank's charter, presenting it as a cornerstone of the government's economic agenda. The key provisions include prohibiting the central bank from financing the state, eliminating temporary advances to the Treasury, limiting purchases of government securities, and scrapping non-transferable notes.

These measures aim to curb money printing and curb the deficit. The bill also seeks to reverse reforms from 2012, which expanded the bank's mandate to include financial stability, employment, and economic development. Milei has personally criticized the bank's former president, Mercedes Marcó del Pont, who was in charge when the amendment was approved.

The bill would also tighten the conditions for removing the bank's president and board members, potentially requiring a two-thirds vote in both chambers. The current charter, Law 24,144, was enacted in 1992. This shift in policy marks a departure from Milei's campaign stance, where he advocated for abolishing the central bank, which he blamed for Argentina's inflation.

The proposal was drafted by Economy Minister Luis Caputo, central bank President Santiago Bausili, and Deregulation Minister Federico Sturzenegger. The economic package, including a zero-deficit fiscal rule, will require negotiations with allied blocs and sections of the opposition to pass.