Milei plans Argentina central bank financing ban

Argentine President Javier Milei announced plans to reform the country's central bank, including a proposed ban on financing government spending.

Milei said in a televised address Thursday that the bill would make preserving the value of the currency the central bank's main mission. He said financing of the state would be prohibited for the National Treasury, provincial and municipal governments, and any purchase of national government bonds on the primary market.

The reform would also seek to make it harder to remove the central bank's leadership, shielding its president and board of directors from what Milei described as political abuse.

Milei, who took office in December 2023, campaigned on cutting public spending and reducing inflation. Inflation has fallen from triple digits to 33.5 percent since he entered office, but his austerity measures have prompted frequent protests.

The announcement came after International Monetary Fund managing director Kristalina Georgieva visited Argentina and praised the country's improved economic position, saying it reflected government work and sacrifices by Argentines. Growth remains sluggish, at 0.2 percent year-on-year, while the IMF forecasts 3.5 percent growth in 2026.

Milei also unveiled a separate bill that would shut down the government in the event of a prolonged fiscal deficit. Under his plan, Congress would have a few weeks to restore fiscal balance. If it did not, a shutdown would halt non-essential state activities, freeze new spending and contracts, and stop salaries for lawmakers and senior executive branch officials, he said.

Daniel Marx, director of the consulting firm Quantum, said Milei's central bank reform plans seek to reduce financial turbulence expected ahead of the 2027 presidential election.