Argentina Treasury Injects $2.5 Billion Into Banks as Milei Shifts From Inflation Fight to Growth
Updated
Updated · Buenos Aires Times · Aug 12
Argentina Treasury Injects $2.5 Billion Into Banks as Milei Shifts From Inflation Fight to Growth
1 articles · Updated · Buenos Aires Times · Aug 12
Summary
$2.5 billion from a local debt auction was distributed to commercial banks instead of being parked at the central bank, a break with past practice aimed at easing liquidity strains.
The move comes as Milei's government broadens its focus beyond disinflation, with the monetary base rising 5.4% in July and the peso weakening 9.1% against the dollar since mid-April.
Officials say more pesos are needed to support lending and prevent a repeat of last year's short-term rate spike, after austerity left consumer spending weak and credit scarce.
Inflation has slowed to 34% from a peak of 289%, but economists warn looser policy could revive price pressures or push Argentines into dollars as growth stalls and elections draw nearer.
Second-quarter GDP likely contracted, 28,000 private-sector employers have been lost, and Milei's approval has slipped, increasing pressure for measures that cushion jobs and industry.