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Caputo Reaffirms Exchange-Rate Bands as Economists Question Reserve Strategy

Economists see the band design as incompatible with credible intervention or reserve rebuilding.

Overview

  • Economy Minister Luis Caputo called the current band scheme "well calibrated" and confirmed it will remain in place.
  • Former minister Domingo Cavallo said the government cannot credibly enforce the ceiling without foreign-exchange reserves to intervene.
  • Since June 2024 there have been only three months with a current-account surplus, while demand for dollar savings exceeded those surpluses every month.
  • Economist Federico Machado said the lower bound is set at an unrealistically low real level and urged the central bank to adopt a different reserves-buying approach.
  • Marina Dal Poggetto warned the stated goal to begin rebuilding reserves in 2026 conflicts with the bands unless substantial external debt placements materialize.