Central Bank reform and fiscal amnesty clash with currency pressure and industrial collapse.

The Chamber of Deputies convened Wednesday with an agenda that concentrates the highest-stakes bets of Javier Milei's economic program for the remainder of his term: the reform of the BCRA's Charter and Fiscal Innocence II. But the legislative day is not the only open front. Simultaneously, the Treasury must roll over 12.6 trillion pesos in maturities, the official exchange rate has consolidated above $1,500 after breaking through an informal ceiling the government itself had defended for nearly a month, and country risk is clinging to the 512-basis-point zone — still far from the level needed for Argentina to return to international debt markets on reasonable terms. It is a day that synthesizes with unusual clarity the tension between what the government is achieving and what has yet to fully consolidate.

The BCRA reform seeking initial approval this Wednesday proposes to fully eliminate the mechanisms by which the monetary authority can finance the public sector, unwinding the changes introduced in 2012 under Kirchnerism. The central article repeals transitory advances to the Treasury and imposes price stability as the sole mandate. The initiative has sufficient backing in the lower house — legislative sources speak of around 130 secured votes — although last-minute modifications to the text cannot be ruled out, including a clause to "federalize" the BCRA's board demanded by allied governors. At the same time, the Fiscal Innocence II bill aims to correct the weak flanks of the law in force since December 2025 in order to attract the USD 170 billion that, according to official calculations, remains outside the system. The main modification eliminates the wealth and income caps that limited access to the simplified regime, although public officials are excluded from the externalization benefits — a concession extracted by allied blocs after the political noise generated by the Adorni case. Not coincidentally, ARCA extended for the third time the deadline for the income tax affidavit until September 22, keeping the window open for more taxpayers to adhere to the simplified regime once the new law is approved.

The Treasury auction scheduled for Thursday is the other vertex of the tension triangle. With $12.6 trillion to roll over, the economic team opted for a defensive strategy: it is offering exclusively very short-term instruments — LECAPs, CER bonds, and a dollar-linked note maturing in October — abandoning the strategy of recent months of placing debt beyond 2027 to "clear" the pre-electoral horizon. According to Infobae, the government has already managed to push approximately 45% of the total peso maturity stock past the elections, but that margin appears to have been temporarily exhausted. The most striking decision is the absence of the Bonar 2029 (AO29) from the menu, a dollar-denominated instrument the government had been using to raise hard-currency liquidity without tapping BCRA reserves. According to La Nación, the pause responds to the fact that the bond's yields have approached double-digit territory, a rate the government does not want to validate at this moment.

The wholesale dollar closed Tuesday at $1,511.50, consolidating its position above the $1,500 threshold that the government itself had defended with currency sales for nearly a month. Economist Gustavo Ber interpreted the move as a signal of greater official flexibility that "improves system liquidity and decompresses rates," a condition he considers necessary for activity to rebound. The exchange rate is up 1.8% in August, in line with monthly inflation that private consultancies now estimate at between 1.6% and 1.9%, a deceleration from July's 2.1% driven mainly by the slowdown in food and beverages. If confirmed, this would be the lowest reading since June 2025. Gross international reserves reached USD 50.912 billion, a high since September 2019, although the BCRA's pace of purchases in August barely averages USD 30 million per day, well below the more than USD 100 million monthly pace of July. Part of the reserves increase reflects the revaluation of gold — trading around USD 4,718 per ounce, more than double the level when Milei took office — without the Central Bank having acquired a single additional ounce.

Against this backdrop of stabilization with cracks, the institutional architecture the government is building has a counterweight in the sector figures. The UIA reported that industrial production accumulated a 2% decline in 2026 through July compared with the same period last year, with July showing a monthly drop of 0.6%. The automotive sector fell 18% year-to-date versus 2025, auto parts retreated 6.7% in the first half, and cement shipments remain more than 20% below 2022 levels. Against this backdrop, the UIA asked ARCA for a 180-day suspension of tax liens and enforcement actions against SMEs — a request the government publicly rejects but which highlights the pressure on the productive fabric. Household credit delinquency, which hit a 24-year high in May and eased only two-tenths in June to 12.7%, has become the first campaign issue in an election that has not formally begun: the government insists it is "a matter between private parties," while Mercado Libre — whose ADRs rose 2.5% on Tuesday in New York — went on the defensive against criticism by noting that it accounts for less than 3% of total system delinquencies, against 15% for Banco Nación and Banco Provincia.

On the export front, the contrast is stark. Agro-industrial chains accumulated USD 31.952 billion between January and July, up 14.9% versus the same period in 2025, with the corn complex sending a record number of trucks to Gran Rosario and international prices providing additional support. Beef exports generated USD 2.768 billion in the first seven months of the year, a 41.8% jump in value. And Southern Energy, the LNG project led by Pan American Energy in association with YPF and Pampa Energía, entered the final stretch of its financing structure: Citi, JP Morgan, Itaú, and Santander are leading a consortium that would structure a loan of around USD 900 million for the pipeline that will connect Vaca Muerta with the Atlantic coast of Río Negro, enabling projected exports of USD 7 billion annually starting in 2027. In parallel, YPF is negotiating the largest private financing in Argentine history — between USD 14 billion and USD 16 billion — for the Argentina LNG megaproject alongside Eni and XRG.

The fiscal result remains positive, reserves are at seven-year highs, inflation is decelerating, and agriculture is exporting at a record pace. But country risk is not budging below 500 points, industry is not rebounding, mortgage credit fell 42% in the first half, and consultancy GMA Capital estimates that the market has already begun to price in adverse electoral scenarios for 2027. What happens in the next 48 hours — the session in Deputies, the outcome of the Treasury auction, and Minister Caputo's press conference announcing new mortgage lines with ANSES's FGS — will determine whether the government manages to recover some of the narrative of political and financial control it needs to stabilize assets before electoral dynamics start dominating bond prices.

**Southern Energy / Pan American Energy (project not individually listed)** — A consortium led by Citi, JP Morgan, Itaú, and Santander is in the final stages of structuring a loan of approximately USD 900 million under a project finance modality for the pipeline that will connect Vaca Muerta with two liquefaction vessels in Río Negro; the project envisions LNG exports to Europe worth USD 7 billion starting in 2027. Total investment amounts to USD 1.3 billion, with between 10 and 12 international financial institutions expected to participate.

**YPF (NYSE: YPF)** — ADRs of the state-controlled oil company retreated 1.9% on Tuesday in New York, in line with the 5% drop in crude prices, although the company is advancing on the structuring of a record financing of between USD 14 billion and USD 16 billion for Argentina LNG alongside Eni and XRG, with JP Morgan and Santander as advisors; if completed, it would be the largest private financing ever secured by an Argentine company and one of the largest in the region.

**Mercado Libre (NASDAQ: MELI)** — ADRs rose 2.5% on Tuesday on Wall Street as founder and CEO Marcos Galperin publicly defended Mercado Pago amid the national debate over delinquency, noting that the platform accounts for less than 3% of total delinquencies in the Argentine financial system, versus 15% for state-owned Banco Nación and Banco Provincia; the company reported that 2.4 million people are behind on payments with fintech firms to some degree, according to the Cámara Argentina Fintech.