Argentina’s monetary base fell by 0.5 trillion pesos in September from the end of August, even as the central bank bought foreign currency for its reserves. Private-sector M2 and the broader M3 aggregate continued to grow, according to the BCRA’s monthly report.
The Banco Central de la República Argentina (BCRA) said foreign-currency purchases added liquidity, but open-market and repo operations more than offset that effect as the central bank managed money supply. It bought $474 million in reserves during the month.
Seasonally adjusted private transactional M2 rose 0.5% in real terms in September. Cash held by the public increased 1.6%, while private M3 grew 0.7%. The BCRA also said the monetary base expanded in real, seasonally adjusted terms over the month.
La Nación reported that the government is maintaining tight control of the peso supply to support disinflation and limit demand for dollars. Economy Minister Luis Caputo said the amount of pesos in circulation had barely grown over the past year. President Javier Milei warned investors that betting against the peso in 2027 could leave them with losses.
Economists cited by the newspaper disagreed on the policy’s effects. Fernando Baer of Quantum said a restricted money supply is intended to contain inflation and exchange-rate pressure, while noting that demand for pesos remains weak. Amílcar Collante of Consultora Profit said nearly 21 trillion pesos issued to buy $14.8 billion in reserves had not entered circulation, which he said could hold back a recovery in economic activity.
The BCRA’s official report confirms the 0.5-trillion-peso contraction in the monetary base and growth in private transactional M2 in September. Claims about how monetary policy affects production, currency demand and economic activity are economists’ assessments.