Argentina halts monetary base expansion to lower inflation, says minister
2024.07.13 11:36
BUENOS AIRES (Reuters) – Argentina will cease expanding its monetary base as part of the government’s campaign to combat inflation, Economy Minister Luis Caputo said on messaging platform X on Saturday.
“From now on the amount of money remains the same or is reduced if the central bank (BCRA) sells dollars” in the official exchange market known as the MULC, Caputo wrote.
“If the BCRA buys dollars in the MULC, the issuance of equivalent pesos will be sterilized with the sale of equivalent dollars in the cash with liquidation (CCL) market,” a market where dollar transactions are settled in cash, Caputo wrote.
The policy will go into effect on Monday.
The announcement comes after official data published on Friday showed a five-month streak of slowing inflation ended in June when inflation was higher than in May.
Since libertarian President Javier Milei took power late last year, inflation has slowed dramatically in Argentina, decelerating from 25.5% in December to 4.2% in May. June’s figure was 4.6%.
