Officials at the Central Bank of the Argentine Republic offered critical perspectives on economic activity, inflation, and the hurdles confronting monetary policy as the nation approaches the upcoming year. The remarks were delivered during the presentation of the Monetary Policy Report for the third quarter, which took place on Thursday and was attended by BCRA President Santiago Bausili and Vise President Vladimir Werning. The conference was announced earlier that same day, catching both insiders and outside observers by surprise, as the IPOM is published quarterly and the previous edition was released on August 6. One of the enquiries posed by journalists pertained to the potential for additional episodes of foreign exchange volatility in 2027, a year characterised by presidential elections in which Javier Milei will pursue reelection. “We have no projections of a currency run. We don’t make those kinds of projections,” Bausili replied.
Officials were also queried regarding the potential for a recurrence of last year’s portfolio dollarization episode, during which election-related volatility propelled demand for foreign currency to an unprecedented $35 billion, as per the BCRA’s own data. However, Bausili refrained from forecasting the magnitude of any possible currency market turbulence or specifying which policy tool the Central Bank would prioritise. “It depends on the nature of the shock,” he stated. He stated that the objective is to “maximize the number of available tools” to ensure that the response can be customised to each specific situation. Officials clarified that the $5 billion segment of the currency swap with China continues to be in effect, while the $20 billion agreement with the United States is also in force, albeit under a different arrangement and has yet to be activated. In the IPOM, Central Bank officials acknowledged that the economy contracted in the third quarter, placing Argentina in a technical recession, but attributed the decline primarily to external “headwinds.” The report anticipates a resurgence in economic activity in the concluding quarter of 2026.
“Once agricultural activity returns to normal and the temporary factors that affected the economy in July dissipate, GDP is expected to post a significant increase in the fourth quarter,” the report stated. However, it also cautioned that economic growth might be limited by the fewer working days in November, attributed to public holidays coinciding with Pope Leo XIV’s visit. “Despite short-term volatility in monthly economic activity indicators, which could be affected by the exceptional reduction in the number of working days expected in November, GDP would grow for the second consecutive year in 2026,” the document noted. During conference, Bausili affirmed that, under his administration, a portion of Argentina’s gold reserves had been relocated to London, recognised as the preeminent market for trading the precious metal. However, he stated that the gold had not been dispatched to the Bank of England. “The Central Bank has nothing in England, and there is no account at the Bank of England,” he confirmed. He elucidated that the gold had been dispatched to the Bank for International Settlements in Basel for receipt.
“What we have is an electronic certificate issued by the BIS confirming that holding,” he said. He also declined to disclose the amount of gold that had been transferred, citing prudential considerations. Bausili stated that he was unaware of the current location of the gold, clarifying that it had been transferred specifically to “monetize it” and achieve a more favourable return on those holdings. In 2024, Economy Minister Luis Caputo confirmed that Argentina had dispatched a portion of its gold reserves overseas, yet he refrained from disclosing specifics regarding the transaction or the destination of the assets. This has sparked criticism from opposition lawmakers concerning the opacity of the operation. Last month, during a presentation before the Senate, Bausili confirmed that “part of the international gold reserves is deposited at the BIS in Switzerland.”
