Central Bank of Argentina vice president outlines stabilisation agenda to reduce external vulnerability through higher domestic saving

The Central Bank of Argentina published Vice President Vladimir Werning’s presentation to Inviu’s annual conference in Buenos Aires on 5 March, arguing that reducing Argentina’s external vulnerability requires boosting domestic saving as a source of funding for private investment. The presentation set out a stabilisation programme aimed at eliminating sources of external vulnerability, including removing the fiscal deficit, adopting exchange rate flexibility to facilitate relative price adjustments, accumulating international reserves consistent with monetary equilibrium, and meeting contracts and net debt payments to reduce country risk. It also highlighted prioritising foreign direct investment as a medium-term external financing source and increasing private saving by retaining savings domestically and repatriating savings held abroad. To support higher saving, the agenda referenced restoring price stability to anchor inflation expectations, ending “financial repression” by promoting free markets with positive real returns for savers, using tax incentives to facilitate capital repatriation and formalisation, advancing a currency competition framework to allow intermediation of Argentine savings in ARS and USD, and developing capital markets and banking while reducing costs.