Live Updates > Live Update Details
2025-12-16 08:05:22
[Argentine Government of the Millais Announces Major Adjustments to Monetary Policy on Monday] 1. The Argentine government of the Millais announced major adjustments to its monetary policy on Monday, taking a key step towards a free-floating peso. The core of the new policy includes that, starting in 2026, the trading band for the Argentine peso will no longer expand at the current fixed rate of 1% per month, but will instead expand at a floating rate linked to the monthly inflation rate. Given that Argentina's inflation rate was 2.5% in November, this means that in the short term, the expansion rate of the trading band could be more than twice the current rate, providing the peso with greater room for fluctuation. 2. Simultaneously, the Central Bank of Argentina announced an aggressive initiative to accumulate foreign exchange reserves, aiming to purchase $10 billion by 2026 to replenish its depleted reserves. The specific purchase amount will be adjusted based on actual currency needs. This series of policy signals regarding the transition to a market-based exchange rate and efforts to stabilize foreign exchange reserves received a positive response from the market. Following the announcement, Argentine sovereign bond prices rose sharply across the board, with the price of highly liquid bonds maturing in 2035 surging by more than 1 cent, reaching nearly 73 cents.
