Argentina Passes Central Bank Reform in Lower House as Milei Courts Governors for Senate
ARGENTINA · ECONOMY
Key Facts
—The vote: The Chamber of Deputies approved President Javier Milei’s reform of the Central Bank’s charter on August 26 by 144 votes to 102, with 9 abstentions. The bill now needs the Senate.
—The reform: It restores a single mandate — preserving the value of the currency — and permanently bans central bank financing of the Treasury, including temporary advances, primary-market debt purchases and new non-transferable notes.
—The Senate math: La Libertad Avanza is negotiating with radical and provincial blocs close to the governors to unlock its September agenda: the bank reform, the Fiscal Innocence II bill and electoral reform.
—The tax freeze: Decree 829/2026 postponed the quarterly fuel-tax update from September 1 to October 1 — the 13th postponement since 2024 — to keep pump prices, and inflation, in check.
—The roadshow: Economy Minister Luis Caputo took the program to the G20 finance meeting in Asheville, North Carolina, for talks with US Treasury Secretary Scott Bessent, days after IMF chief Kristalina Georgieva publicly backed the Argentine program.
Argentina’s lower house has passed the cornerstone of Milei’s monetary doctrine — a central bank that may never again print money to finance the state. The harder test begins now: a Senate where the government needs the governors’ votes, and a September calendar packed with tax, labor and electoral battles.
What the reform actually changes
The bill rewrites the Carta Orgánica, the charter that governs the Central Bank of the Argentine Republic (BCRA), rolling back the 2012 reform enacted under Cristina Fernández de Kirchner that gave the bank five simultaneous goals, from employment to “social equity.” The new text restores a single mandate: preserving the value of the currency. “The fundamental mission of the Central Bank is once again to preserve the value of the currency,” Milei said presenting the bill in a national broadcast, calling it “a fundamental step to eradicate inflation from the lives of Argentines.”
The operative clauses are aimed at the mechanisms that financed two decades of deficits. The BCRA would be barred from granting temporary advances to the Treasury, provinces, the city of Buenos Aires or municipalities, and from buying public debt directly at Treasury auctions. The bill explicitly prohibits new Letras Intransferibles, the non-tradable notes the Treasury once handed the central bank in exchange for reserves. Profit transfers are capped: only real operating gains count, reserves must first reach 50 percent of the bank’s capital, and any remainder may fund only debt cancellation. Board members would serve six-year terms and could be removed only for cause with two-thirds majorities in both chambers — “so that no politician can fire the BCRA president at will,” as Milei put it.
The Senate road runs through the governors
“Now we fight it in the Senate,” Milei posted after the 144–102 vote. That fight is already being negotiated. La Libertad Avanza holds no majority in the upper chamber, so the government is working the blocs that answer to provincial governors — the same alliance logic that delivered the lower-house vote. Cabinet Chief Diego Santilli has been meeting so-called dialoguist senators, and the ruling party is offering movement on the opposition’s own priorities — a regime for mid-sized investments, a carbon market and biofuels rules — in exchange for clearing the government’s September trifecta: the central bank reform, the Fiscal Innocence II bill and electoral reform, Noticias Argentinas reports.
The opposition, newly coordinating as a single front, is testing the government from the other side: it has formally requested a September 9 session in the lower house on the disability emergency and on households over-indebted with banks and digital wallets — two issues where Milei’s veto record is politically costly. The governors, courted by both camps, hold the swing votes in both chambers.
A one-month truce at the pump
While Congress argues over the charter, the executive moved to protect September’s inflation print. Decree 829/2026, published Monday in the Official Gazette and signed by Milei, Santilli and Caputo, postponed the quarterly update of the liquid-fuels tax and the carbon tax from September 1 to October 1, extending the current schedule through September. It is the 13th postponement since 2024; the backlog of adjustments from 2024, 2025 and the first half of 2026 now lands in a single October increase on gasoline and diesel.
The decree argues the delay will “continue stimulating economic growth through a sustainable fiscal path.” The trade-off is visible in the price structure: the liquid-fuels tax has climbed from 8.9 percent of the price of a liter of súper gasoline in November 2023 to 19.25 percent in July 2026, according to the Instituto Argentina Grande — so each postponed update is a larger revenue deferral, and each eventual catch-up a bigger jolt to the consumer index the government is trying to keep below expectations.
Caputo sells the program in Asheville
Caputo carried the same message to the G20 finance ministers’ meeting in Asheville, North Carolina, where he held talks with US Treasury Secretary Scott Bessent — the administration’s most important ally in Washington — on the bilateral economic relationship and the outlook for the program. The Argentine delegation, which includes BCRA president Santiago Bausili, is showcasing the fiscal surplus and monetary stabilization; Caputo also had a slot on a panel on global growth.
The trip follows the public endorsement The Rio Times covered this week: IMF Managing Director Kristalina Georgieva praised Argentina’s turnaround, while her deputy Gita Gopinath paired the praise with two demands — faster reserve accumulation and a more flexible exchange rate. Fund staff are monitoring tax collection, the fiscal result and private credit, where household delinquency has risen to record levels. The Asheville meetings set the tone for the IMF’s next program review this fall.
Why the region is watching
If the Senate converts the bill, Argentina would join the regional mainstream in which direct central bank financing of the treasury is banned outright — and go further than most by stripping employment and development from the mandate, a single-objective model closer to Colombia’s than to Brazil’s or Chile’s, according to a Chequeado comparison. For a country whose annual inflation peaked near 290 percent in April 2024 and fell to 31.4 percent by November 2025, the charter is Milei’s attempt to lock the exit door behind his own program: rules that outlast the government that wrote them.
Frequently asked questions
What did Argentina’s lower house approve?
On August 26 the Chamber of Deputies passed Milei’s reform of the Central Bank charter by 144 votes to 102 with 9 abstentions. The bill restores price stability as the bank’s single mandate and permanently bans monetary financing of the Treasury. It still needs Senate approval.
How would the reform stop money printing?
It bars temporary advances to any level of government, blocks primary-market purchases of public debt, prohibits new non-transferable Treasury notes, and caps profit transfers to real operating gains earmarked for debt cancellation.
What happens in the Senate?
The government lacks a majority and is negotiating with radical and provincial blocs tied to the governors, offering progress on their investment, carbon-market and biofuels agendas in exchange for votes on the bank reform, Fiscal Innocence II and electoral reform in September.
What was frozen on fuel taxes?
Decree 829/2026 postponed the quarterly update of the liquid-fuels and carbon taxes from September 1 to October 1, the 13th delay since 2024, to keep pump prices from feeding September inflation.
Why did Caputo meet Bessent?
At the G20 finance meeting in Asheville, Caputo sought continued US backing for the economic program days after the IMF’s Georgieva praised Argentina’s stabilization — while her deputy pressed for faster reserve accumulation and a more flexible peso.
Sources: Bloomberg Línea; La Nación; Chequeado; Noticias Argentinas; C5N; Boletín Oficial (Decree 829/2026); Instituto Argentina Grande; El Doce; La Brújula 24; Hoy Día Córdoba; Ámbito; BCRA monetary policy statement.
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