The Central Bank Must Respond to the Currency, Not the Government

During the 2023 presidential campaign, one of the proposals that generated the most impact was Javier Milei's promise to eliminate the Central Bank. It was a powerful idea symbolically: if for decades the institution had been used to finance the deficit, fuel inflation, and destroy the savings of Argentines, why not do without it?

Today, the President proposes a different path: to reform the Central Bank. And I believe this change of focus deserves to be celebrated, as it shifts the debate from slogans to institutions.

The real problem in Argentina has never been the existence of the Central Bank. The problem has been turning an institution that should safeguard the value of the currency into a tool serving the needs of the current government. The discussion, then, should never have been whether the Central Bank exists or not. The real discussion has always been how to build a Central Bank that can never again be used against the currency of the Argentines themselves.

Our Constitution offers a response that has been ignored for too long. The constituent placed the monetary regime under the orbit of Congress because he understood that the currency constitutes an institution of the Republic and not an instrument of the current president. That decision was not casual: the greater the political discretion over the currency, the greater the risk that it will end up being used to solve immediate fiscal problems at the expense of savings, wages, and investment.

Countries that have managed to build reliable currencies did not eliminate their central banks; they strengthened them institutionally. The Federal Reserve of the United States enjoys a high degree of operational independence, but its authorities regularly appear before Congress, and their decisions are subjected to intense public scrutiny. The European Central Bank has even greater autonomy, although its mandate is strictly defined by treaties, and its president periodically reports to the European Parliament. Chile, for its part, constitutionally enshrined the autonomy of its Central Bank and established staggered mandates for its board members, precisely to prevent each change of government from leading to a political capture of the monetary authority.

The lesson is clear. Independence never means absence of controls. It means protecting technical decisions from short-term political urgencies while strengthening mechanisms of institutional accountability.

While in 2023 much of the public debate revolved around the destruction of the Central Bank, I presented as a national deputy a bill proposing a different path: to reform its institutional design to restore the balance envisioned by the Constitution and return an effective role to Congress in overseeing its authorities. The initiative proposed that Congress could promote a procedure for censure and removal of board members when they failed to fulfill the duties imposed by law, thus reaffirming that those who manage the currency must also be institutionally accountable for their actions. I did not share the idea of eliminating the Central Bank; I understood that the problem was not its existence, but its capture by political power. I celebrate that today the President himself has brought the debate to that same ground: that of institutional reforms.

But a true reform cannot be limited to modifying organizational charts or changing authorities. It must redefine the mission of the institution. A modern Central Bank must have precise objectives: to preserve the value of the currency, to prevent the permanent financing of the deficit from becoming a common practice, to guarantee its technical independence from political power, to be accountable periodically to Congress, and to contribute to the development of a financial system capable of transforming savings into productive credit.

The Central Bank cannot be subordinated to the political needs of the current government. It must strictly focus on safeguarding the collective liquid wealth accumulated by Argentinians and strengthening the mechanisms that allow credit to grow for businesses and families. To fulfill this mission, it needs institutional autonomy from political power, along with effective accountability mechanisms to society and Congress.

Monetary stability and credit development are not opposing objectives. On the contrary, a reliable currency is the essential prerequisite for savings to exist, for those savings to be transformed into credit, for businesses to invest, for families to access financing, and for the economy to grow sustainably. No country can develop deep credit markets with a currency that permanently loses value.

The Central Bank must be the guardian of the collective liquid wealth accumulated and of the trust among Argentinians. That is its true reason for being. When this institution is subordinated to the political needs of each government, it stops protecting the savings of society and begins to finance the urgencies of power. This is where the deterioration of the currency begins, and with it, the loss of one of the essential foundations upon which any modern economy is built: trust.

Nations are not built solely with fiscal balance. They are also built with institutions that generate trust. A Central Bank that responds to the currency and not to the government does not guarantee Argentine development by itself, but it is difficult to achieve it while the institution responsible for safeguarding our currency continues to depend on the urgencies of politics. Reforming it does not mean weakening it; it means finally turning it into the institution that the Constitution envisioned and that Argentinians have been waiting for too long.

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