Milei’s Team Looks Set to Accept Senate Terms on Central Bank Reform

Argentina’s central bank reform has already cleared both chambers of Congress in different forms. The last obstacle is procedural, and the government now looks ready to give ground on it.

Officials are weighing whether to ratify the Senate’s version of the central bank reform, Canal 26 reported on 26 September. Reversing that text in the Chamber of Deputies would need a majority the ruling coalition does not hold.

Why This Matters

The Banco Central de la República Argentina, or BCRA, is the country’s monetary authority. The reform rewrites its charter, the law that sets what the bank may and may not do.

It gives the bank a single mandate, which is preserving the value of the peso. The previous charter, written in 2012, also listed employment and economic development.

The text bars temporary advances to the Treasury and non-tradable government IOUs. It also stops the bank buying state bonds at issue or lending to provinces.

Gains from currency moves or gold prices can no longer be passed to the Treasury. For creditors, this is the legal backbone of Milei’s anti-inflation programme.

For citizens, it decides whether future governments can print money to cover deficits. The Rio Times reported the Senate vote on 25 September.

What the Senate Changed

Senators left the monetary rules intact and rewrote Title I of the bill. That title governs how the bank’s president, vice-president and directors are appointed and removed.

The version from Deputies required two thirds of both chambers to remove them. The Senate replaced that with an absolute majority in the upper house alone, meaning 37 votes.

Appointments would be made by the executive with Senate agreement by the same majority. Directors would serve six-year terms and could be reappointed, iProUP reported.

Six years is longer than a presidential term, which runs for four. Supporters say that staggering insulates the board from each incoming president.

Critics say it concentrates the decision in one chamber rather than two. The rest of the bill returned from the Senate unchanged.

Senators from several provincial blocs backed the governance clause while opposing the wider reform. That split explains why one section of the bill drew far more support than the whole.

The Procedure That Forces the Government’s Hand

Argentine law-making runs through article 81 of the constitution. A bill starts in one chamber, which is called the originating chamber.

If the second chamber amends it, the first may accept the changes or insist on its own text. The majority needed to insist depends on how the amending chamber voted.

If the amendments passed by two thirds, the originating chamber also needs two thirds. If Deputies cannot reach that majority, the Senate’s version goes to the president.

The Senate approved the bill 46 to 22, which is above two thirds of those present. Canal 26 reported that the governance clause itself drew 66 votes in favour and two against.

Deputies therefore cannot restore their own wording with a simple majority. They may also not add new changes of their own, under the same article.

The choice is therefore binary, between the Senate wording and a blocked bill. Partial acceptance of some amendments is possible in practice, but new drafting is not.

Why the Government Is Ready to Accept

The lower house passed the original text 144 to 102 on 26 August. That is about 56% of the chamber’s 257 seats, well short of two thirds.

Officials see reversing the Senate wording as difficult, Diario de Cuyo reported. The same report said internal disagreements over the wording persist.

The political team is expected to settle the question on Tuesday 29 September. That meeting falls on the day the president leaves for a trip to Paris.

Delay would push the reform into a congress distracted by the 2027 budget. It would also leave the bank’s charter unresolved while borrowing costs rise.

Country risk closed at 609 basis points on 25 September, its highest since early April. The Rio Times covered that market move this week.

The reform has been a reference point for investors since Deputies first voted in August. Finishing it removes an item from the list of pending Milei bills.

Reactions From Both Sides

Security Minister Patricia Bullrich, who leads the ruling bloc in the Senate, defended the text. She said a strong central bank protecting the currency decides how far a salary goes.

Senator Agustín Monteverde, who chairs the budget committee, called it a return to rules over discretion. Milei wrote that the end of inflation was beginning, iProUP reported.

Peronist senator Martín Soria said the government wanted protection over past gold transfers, Tiempo Argentino reported. He alleged those operations caused losses of about US$1 billion, which the government has not publicly answered.

Senator José Mayans argued the new text would let the bank act without proper accountability. Senator Flavia Royón backed the principle but objected to four specific articles, the same outlet reported.

Radical senator Eduardo Vischi called fiscal balance without growth a cemetery peace, Infobae reported. The Institute of International Finance said the rules would rank among the region’s strictest, iProUP reported.

What It Means If You Hold Argentine Assets

The reform is one of the anchors that bondholders cite when pricing Argentine risk. Ratifying the Senate text ends the legislative process and removes one source of doubt.

A fight over wording would keep the charter open for weeks or longer. Senator José Mayans put net reserves at negative US$5.826 billion, Parlamentario reported.

Savers in Argentina should note that the charter does not change deposit rules. Its effect is on how the state finances itself, not on bank accounts directly.

Companies planning peso borrowing will watch whether the single mandate survives politically. Laws can be amended again, and the next Congress is elected in October 2027.

A charter is ordinary legislation, so a future majority could rewrite it. That is the argument both supporters and critics make about its durability.

What Is Not Yet Known

No date has been set for the vote in the Chamber of Deputies. The government has not confirmed publicly that it will accept the Senate wording.

It is unclear how allied blocs in the lower house will vote. The bank’s current board has not said how the six-year terms would apply.

There is no published timetable for naming directors under the new rules. Whether the reform changes market pricing in practice remains to be seen.

The accusations made by opposition senators have not been tested in court. No ruling or formal investigation has been reported on the gold transfers they cite.

The bank has not published a response to those specific allegations. Nothing in the reform text refers to the gold operations under dispute.

Background: Brazil: Split Payment, the World’s Broadest Instant Tax Collection, Will Only Be Mandatory in 2028.

Frequently Asked Questions

Sources: Canal 26, government weighs accepting the Senate changes, Diario de Cuyo, government would accept Senate changes to advance the reform, iProUP, what the Senate changed in the BCRA charter, Tiempo Argentino, opposition speeches during the Senate debate, Infobae, the Senate amended the charter and sent it back, Parlamentario, Senate approval and return to Deputies, Chamber of Deputies, glossary on insistence under article 81