Argentina votes this week on the reform barring the central bank from funding the Treasury

Argentina's Chamber of Deputies is set to debate a reform of the central bank's charter on Wednesday, which would prohibit the monetary authority from financing the fiscal deficit through money creation and restore the preservation of the currency's value as its sole objective. The bill removes five functions previously added to the institution's mandate by the 2012 reform, replacing them with a single objective, and prohibits the purchase of national, provincial, or municipal government bonds on the primary market.

Central bank governor Santiago Bausili and deputy governor Vladimir Werning defended the initiative, arguing that it aims to shield the institution from political pressures and consolidate a structure aimed at preventing a return to high inflation. Additionally, the session will take up the Fiscal Innocence II bill, which expands a simplified scheme designed to bring undeclared assets into the formal system, estimated by the government at around 170 billion dollars.

The debate comes amid deteriorating financial indicators, with the country risk premium passing 470 basis points in August and sovereign bonds giving up much of their first-half performance.

Brief written by urgent.news from MercoPress's own syndicated text. Machine-written — may contain errors; check the original before relying on it.