Before the Kirchnerist intervention, the limits were strict:
The temporary advances were granted for a maximum period of 12 months.
Javier Milei promotes a reform of the BCRA's Organic Charter to shield the peso against inflation
The Government aims to restore the priority of preserving the value of the currency, limit the issuance to finance the Treasury, and return independence to the Central Bank
Before the Kirchnerist intervention, the limits were strict:
The temporary advances were granted for a maximum period of 12 months.
They could not exceed 12% of the monetary base.
An additional 10% based on the revenue of the last year was allowed.
However, populism raised these caps, adding another 10% of the revenue with "exceptional" character and eliminating the obligation to use those funds exclusively for payments to international organizations.
In this way, the Executive Power obtained an unlimited "credit card," forcing the Central Bank to issue bonds to withdraw the excess money (sterilize), which generated a mountain of remunerated liabilities that brought the country to the brink of a new hyperinflation.
Javier Milei's plan is clear: to return to the regulations prior to 2012 to drastically reduce the capacity for monetary issuance intended to cover the fiscal deficit. The proposal seeks to restore the margin of independence of the monetary authority, which today is forced to act under the policies of the National Government according to the changes imposed during the Kirchner era. With this reform, the ruling party seeks to seal the commitment to "defend the value of the currency", a mission that the President considers fundamental to end the cycle of Argentine decay.
In a decisive step towards financial health, the Government aims to dismantle the inflationary architecture inherited from Kirchnerism. President Javier Milei has defined the priorities of his parliamentary agenda with a clear objective: to restore the Central Bank to its purpose of existence, through the restoration of the Organic Charter.
This is not just a technical reform; it is a declaration of war against the uncontrolled monetary issuance that plunged the country into misery while populism used the BCRA as its personal savings account. The battle will be fought in modifying its fundamental functions to preserve the value of the currency and eradicate forever the cancer of inflation
This counteroffensive directly targets the 2012 reform, executed during the presidency of Cristina Fernández de Kirchner, when the BCRA was transformed into an appendage of the Treasury. The president was blunt about this in his recent presentation before the Faro Foundation, where he stated: "What can we expect from someone from a Kirchnerist Central Bank? The brute Marcó del Pont assigned five objectives to an economic policy instrument".
The Kirchnerist reform, driven by the then-president of the entity, Mercedes Marcó del Pont, attacked the heart of Article 3 of the Organic Charter. What was once the "primary and fundamental function" of "preserving the value of the currency" was replaced by a vague multiple mandate that sought to "promote monetary stability, financial stability, employment, and economic development with social equity".
Under this disguise of "social justice," the State forced the Central Bank to neglect the fight against rising prices to finance political projects, a decision that, as Milei denounced, ended up destroying the purchasing power of Argentines. In this regard, the President recalled that, for not defending the currency, the peso "had 13 zeros taken off".
Beyond the slogans, the 2012 reform hid a perverse mechanism in Article 20 regarding temporary advances. This tool allowed the BCRA to finance the Treasury with unprecedented monetary issuance.