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Argentina Links FX Band to Inflation and Unveils Reserve Plan, Driving Risk to 7‑Year Lows

Markets rallied after the central bank set an inflation‑indexed regime starting January 1, 2026.

Overview

  • BCRA will adjust the exchange‑rate band monthly by the CPI from two months prior (IPC T‑2) beginning January 1, 2026, replacing the fixed 1% monthly crawl, with January guided by November’s 2.5% inflation.
  • The central bank announced a conditional reserve‑accumulation program that could enable purchases of up to US$10 billion if balance‑of‑payments conditions allow.
  • Argentina’s sovereign risk fell to roughly 555–569 points, the lowest since 2018, as dollar bonds firmed and S&P lifted the sovereign rating one notch to CCC+ with a stable outlook.
  • After an initial jump, the official dollar eased by $5 to $1,475 at Banco Nación, the wholesale rate hovered near $1,451, the blue stayed around $1,500, and financial dollar moves were contained.
  • Officials are still arranging dollars for early‑January bond payments of about US$4.2–4.3 billion, exploring swaps, bank loans and market options, and Economy Minister Luis Caputo said a bond replacement could lower risk toward 490 points.