The Central Bank of Argentina reported that vice president Vladimir Werning presented at the Bank for International Settlements meeting of emerging market deputy governors in Basel on the “distributional effects of monetary policy”, arguing that Argentina’s stabilisation programme has delivered large, broad-based gains. The presentation framed monetary policy as operating alongside fiscal and exchange-rate policy to eliminate excess money, and highlighted an initially unconventional strategy of cutting interest rates and transferring Central Bank liabilities to the Treasury, which it linked to rapid disinflation in 2024 and inflation expectations becoming anchored in 2025. The presentation attributed the disinflation to eliminating endogenous money supply flows and reducing the monetary overhang, with the Treasury absorbing residual liquidity to enable demand-driven remonetisation. On distributional effects, it argued that lower inflation reduces the inflation tax borne via the government and banks, supports a fall in poverty with the largest benefits for lower-income households, and, together with deregulation and converging inflation expectations, boosts private-sector credit, while price stability and fiscal austerity support higher equity and bond prices. It also noted that observed distributional outcomes reflect a mix of monetary stabilisation and government-driven relative price changes, including reductions in tariff and non-tariff barriers, adjustments to regulated utility prices and deregulated rents, and a narrowing of exchange-rate dispersion that shifts resources from importers toward exporters and consumers.

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