BCRA Reform: Criticism of the Peruvian Model and Fiscal 'Shutdown'

President Javier Milei announced in a national broadcast the reform of the Charter of the Central Bank of the Argentine Republic (BCRA), along with a «fiscal shackle» project and the deregulation of the capital and insurance markets. The initiative, still in the works, seeks to establish a system similar to that of the Central Reserve Bank of Peru (BCRP), with restrictions on monetary financing and penalties for issuance. The opposition and economists criticized the announcements, while the Government did not provide details of the final text.

What the Government proposes and what is known about the project

According to the Presidency of the Nation, the project is «in the works» and the official announcement is expected in the coming weeks. The Cabinet meeting on July 9, after the Tedeum, served for Milei to provide details to his officials, but the text was not released. The head of state anticipated that the project will be sent to Congress for consideration, although no date was set.

The official source does not specify the content of the reform, but Milei’s statements and opposition reactions allow us to infer some key points: limiting the BCRA’s direct financing to the Treasury, restricting monetary issuance, and making it difficult to remove Central Bank authorities. The president also mentioned a «fiscal shackle» that would suspend state services in the event of a fiscal deficit.

Criticism from the opposition: the Peruvian model and the «shutdown»

National deputy for Unión por la Patria, Itai Hagman, questioned the reform on his X account: «The model proposed by the president is not used in practically any country in the world.» He also noted that the fiscal «shutdown» «is also not applied in almost any country» and that in the United States «it has caused havoc.» Hagman also criticized the official narrative: «Again the president promises ambitious reforms to sustain the narrative that they are changing history.»

Former BCRA president Alejandro Vanoli denounced in an interview with El Destape that the reform seeks to «leave a Trojan horse for the incoming government.» Vanoli recalled that in 2015, when he presided over the Central Bank, the current ruling party questioned the removal of authorities. He also cast doubt on the independence of the current authorities, since «the president of the BCRA (Santiago Bausili) and the Minister of Economy (Luis Caputo) were partners.» Regarding criminal sanctions on issuance, Vanoli stated that «there is no country that criminalizes monetary issuance.»

The Center for Argentine Political Economy (CEPA) prepared a report comparing the reform with the Peruvian model. According to CEPA, Milei’s project «takes the prohibition of direct monetary financing like Peru,» but «exceeds it in several aspects.» For example, Peru retains a clause to buy debt securities on the secondary market, while the Argentine reform «would not contemplate these operations.» In addition, Milei adds criminal sanctions for issuance and conditions the Treasury’s use of BCRA profits, something Peru does not contemplate.

The role of central banks in other countries

CEPA also compared the mandates of the central banks of the United States, Israel, Brazil, Mexico, Uruguay, Chile, England, and the European Union. According to the report, all have more missions than «preserving the currency,» including promoting employment, production, and regulating the financial system. This contrasts with the «single mandate» that Milei wants to impose on the BCRA.

Vanoli, for his part, noted that financing to the Treasury is not unlimited in many countries, but that «there are always indirect mechanisms.» He cited the European Central Bank as an example, which during the international crisis «had to go out and violate the statute or find a way» to finance the states.

The ruling party’s stance and the political context

The Government presented the reform as an institutional advance, but has not published the text. The official source only reports that the project is in the works and will be announced in the coming weeks. President Milei, in his speech, stated that the BCRA was used to «steal» through monetary issuance, and that the reform seeks to end that.

From La Izquierda Diario, the opposition media outlet criticized the initiative: «Milei goes from ‘setting fire’ to the Central Bank to using it as a shield for the adjustment.» The article maintains that the reform «shields the fiscal adjustment» and «offers greater guarantees to financial capital,» prioritizing the payment of public debt. It also links the announcement to the visit of IMF Managing Director Kristalina Georgieva and to the agenda of deregulation and foreignization of land.

What data to follow

The central data point to follow is the publication of the text of the BCRA Charter reform project. The Government announced that it will send it to Congress, but so far there is no official version. Also relevant is the treatment of the «fiscal shackle,» which could imply the suspension of state services. The opposition and economists warn about its effects, but the ruling party has not yet presented the details. The comparison with the Peruvian model and criminal sanctions on issuance will be points of debate in Congress.

Data comparison: what the sources say

Methodological note: The table compares the information available in each source. The official source (Presidency) does not detail the content of the reform, so it is marked as «Not specified.» The opposition sources (El Destape and La Izquierda Diario) offer descriptions based on the presidential announcement and statements by leaders, but do not cite the project text. No numerical data are included because the sources do not provide specific figures.

Value module: Difference in the number of BCRA missions proposed by Milei (1: «preserve the currency») versus those of other central banks (multiple). Document: CEPA report (secondary, cited by El Destape). Organization and date: CEPA, July 2025 (according to El Destape). Unit: number of missions. Values used: proposed BCRA: 1; other central banks: more than 1 (according to CEPA). Operation: qualitative comparison; no percentage is calculated because exact numbers are not specified.