The reform of the BCRA Organic Charter received 144 votes in favor, 102 against, and 9 abstentions, taking a key step to limit issuance and strengthen monetary stability
The Chamber of Deputies became the stage for a fundamental political victory for the administration of Javier Milei, achieving the approval and half sanction of the profound reform of the Organic Charter of the Central Bank of the Argentine Republic (BCRA).
The bill advanced unappeasably thanks to a solid backing of 144 votes in favor, against just 102 votes against and 9 abstentions. This key legislative result represents a decisive step to "strengthen economic stability" and send an indisputable "signal of stability to the markets" that Argentina has decided to mature fiscally.
The deputies approved the reform of the Central Bank's Organic Charter
Immediately after the monumental vote was consolidated in the chamber, President Javier Milei took to his social media to exuberantly celebrate what he called "a fundamental step to eradicate inflation from the lives of good Argentines...!!!".
With an eye on the reconstruction of monetary order, the president thanked the patriotic commitment of the Lower House and urged to sustain the battle in the next legislative instance to definitively bury the inflationary scourge:
"Now to fight it in the Senate. VLLC!". This resounding political victory for the ruling party was made possible thanks to a solid architecture of consensus where La Libertad Avanza garnered support from allied blocs such as PRO, UCR, MID, part of Provincias Unidas, Argentina Federal, Independencia, Producción y Trabajo, and Por Santa Cruz.
The celebration of this milestone was joined by the ruling party deputy and former Minister of Defense, Luis Petri, who tore apart the old issuing regime of the elite by recalling that Argentina suffered "113 years of fiscal deficit" where the great financier of the debacle was always the Central Bank, historically transformed into the "ATM of populist governments" at the cost of removing "13 zeros" from our currency.
Petri vehemently denounced that Argentines endured for a century "a permanent, silent confiscation, without judge or sentence" via monetary issuance.
The president, Javier Milei
In line with the direction of economic transparency, the legislator closed with a lethal warning to prevent politics from looting taxpayers again: from now on, the entity "will have the sole mission of preserving the value of the currency and any public official who fails and seeks to finance the State through issuance will go to jail"
At the institutional level, this historic measure aims to dismantle the populist model by "reversing the reform of the Organic Charter made by Kirchnerism in 2012". That modification from the Kirchnerist era distorted the institution's objectives by loading it with multiple purposes such as promoting employment and development with social equity, using them as an excuse to force monetary issuance.
With the new regulation promoted by the ruling party, the institution now led by Santiago Bausili and Vladimir Werning will regain its technical north, establishing that it will have a single and sacred priority mandate: "preserve the value of the currency".
Specifically, the reform introduces ironclad locks to prevent politics from looting taxpayers' pockets again.
The president, Javier Milei
The law establishes in a decisive manner the "explicit prohibition of direct or indirect financing of the Treasury". Consequently, the BCRA will be disabled from making "temporary advances", the mechanism that historically financed the fiscal deficit of successive governments through uncontrolled issuance of pesos. Likewise, the highest monetary authority will not be able to "directly purchase public securities in the primary market".
Finally, the law consolidates the legal security of the authorities of the Central Bank. To remove the president or any member of its board, a "serious cause" must be transparently accredited, which will require validation by a two-thirds majority in the Chamber of Deputies and in the Senate.
As a sign of willingness for federal dialogue, the ruling party is considering addressing the proposal from various allied governors aimed at "federalizing the board of the Central Bank" by incorporating directors who represent the provinces "by regions".
