BCRA shrinks monetary base by ARS 0.5 trillion in September

The Central Bank of the Argentine Republic (BCRA) reduced its monetary base by ARS 0.5 trillion in September, comparing month-end balances. A moderate liquidity injection from purchasing US$474 million in foreign reserves was more than offset by sterilisation through repos and Treasury financing operations, according to the bank's September Monetary Report.

Private transactional M2 rose 0.5% month-on-month in real, seasonally adjusted terms, driven by a 1.6% increase in circulating currency held by the public compared to August. Broader private M3 grew 0.7% in real terms. Across 2026, monetary supply aggregates show cumulative real declines between 2.2% and 5.5%, deepening to drops of 6.9% to 15.2% against September 2025.

Relative to gross domestic product, the monetary base fell from 4.3% at the end of 2025 to 4% at the end of September. Total M2 dropped from 8.6% to 8.1% of GDP over the same period. Total M3 remained stable, moving from 16.4% to 16.5% of GDP, supported by a 4.3% rise in peso time deposits.

Economist Amílcar Collante of Consultora Profit noted that the BCRA issued nearly ARS 21 trillion to purchase US$14.8 billion in reserves, but sterilisation absorbed that liquidity so that none entered circulation. Fernando Baer, director at consultancy Quantum, pointed out that regulatory changes allow banks to lend up to 15% of dollar deposits to non-exporting sectors, contributing to an endogenous dollarisation.