Argentina’s FX Regime Holding Firm, Say Caputo and Bausili

Argentina’s Economic Team Holds Firm on Exchange Rate Regime Amid External Pressures Argentina’s top economic officials reiterated their commitment to maintaining the current foreign exchange regime despite ongoing external pressures, emphasizing resilience in the face of recent shocks. Economy Minister Luis Caputo and Central Bank Governor Santiago Bausili made the remarks during an Atlantic Council event in Washington, D.C., where they defended the government’s stabilization program under President Javier Milei. The officials argued that Argentina has successfully weathered recent external stressors without breaking its exchange-rate framework or triggering significant financial instability—a marked departure from historical patterns. In past crises, external pressures often led to abrupt changes in the currency regime or domestic financial turmoil. This time, they contended, the policy framework has held firm. Bausili highlighted that the Central Bank is not preparing to loosen monetary policy despite rising unemployment, which reached 7.5 percent at the finish of 2025, and accelerating inflation. Consumer prices rose to 3.4 percent in March and 2.9 percent in February, pushing annual inflation to 32.6 percent. The governor attributed the recent uptick in inflation to relative-price adjustments—citing fluctuations in petrol and beef prices as examples—rather than a failure of the broader disinflation process. Caputo confirmed that there are no plans to alter the exchange rate scheme following the October 2025 legislative elections, dismissing rumors of potential modifications to the band system. He emphasized that the current structure of wide exchange rate bands was intentionally designed to allow a gradual transition toward a latest regime whereas minimizing market nervousness. Both officials framed their appearance in Washington as part of a broader effort to secure international support, including ongoing talks for a US$2-billion loan backed by the World Bank. They stressed that Argentina’s focus remains on underlying inflation trends rather than reacting to short-term shocks in relative prices. The government’s economic team continues to navigate a complex environment marked by electoral uncertainty and external volatility, but maintains that its stabilization plan is diverging from previous Argentine economic cycles. By holding firm on the exchange rate framework and avoiding reactive policy shifts, Caputo and Bausili argue that Argentina is building greater resilience to external shocks.