Arriazu Warns of a Currency Run in 2027 and Calls for Urgent Government Changes

The economist Ricardo Arriazu issued a strong warning about the Argentine economy and pointed out the risk of a currency run in 2027. Arriazu demanded urgent changes in the monetary scheme of Javier Milei's government and questioned the Central Bank's strategy to accumulate reserves, warning about its negative impact on credit supply, economic activity levels, and overall macroeconomic stability.{#p-1793287790140-80486}

The main warning expressed by the economist was that the BCRA's strategy of accumulating reserves could become a severe obstacle for the administration if it continues to displace resources towards the public sector at the expense of financing the private sector. Arriazu warned of the risk of a new recessionary process and a consequent currency run towards 2027 if economic activity fails to consolidate a more dynamic recovery pace.{#p-1793289310377-79399}

"I am in favor of accumulating reserves, but not at the cost of suffocating internal credit. Otherwise, it generates recession, distrust, and a currency run next year. Why should I accumulate dollars if I am the one creating the problem?" the economist stated during the meeting <>, organized by Lantia Capital in Puerto Madero.{#p-1793289395949-42139} "I am in favor of accumulating reserves, but not at the cost of suffocating internal credit," he noted.{#p-1793292125647-38638}

The Risk of Monetary Policy

The economist maintained that "if I had a good harvest, had hydrocarbons, had mining, had favorable terms of trade, and had lower currency purchases, I should have been growing at 5.5%, and I am growing at less than 2%. And the cause is the purchases of the Central Bank (BCRA)".{#p-1793289714586-320}

For Arriazu, the Treasury should stop absorbing pesos through debt issuance and return that liquidity to the market. "Why should I take the money that the private sector is not willing to take? Let them return the money. They will lend the money or lower the rate," he argued.{#p-1793289761782-93884} "A change in monetary policy would allow for a rapid economic recovery, but for that, it must be understood. And I am not sure they really understand it," Arriazu stated.{#p-1793292195110-79571}

"A change in monetary policy would allow for a rapid economic recovery, but for that, it must be understood. And I am not sure they really understand it," he affirmed.{#p-1793289929548-62922}

For Ricardo Arriazu, the purchase of dollars by the Central Bank responds to a monetary phenomenon and not to the trade balance. The economist explained that if the issuance to buy foreign currency exceeds the real demand for money, the excess pesos must be withdrawn to avoid a currency or inflationary spike, a cleansing that ---he warned--- was done at the cost of destroying credit.{#p-1793290045059-30157}

Darts at the "Damn" Currency Band

In 2024, the government bought $25 billion to cancel debt and unpaid imports, Arriazu reviewed. In 2025, "they set the damn band" and bought zero because they wanted the exchange rate to hit the floor. This year they changed the criteria and said they would not sterilize if the demand for pesos increased. "I stood up and applauded," he recounted.{#p-1793290093523-42591}

But "in their eagerness to buy dollars, they bought more dollars than the market was willing to absorb", added the economist. He further stated: "How the hell did they buy? By destroying internal credit," since part of those dollars the Central Bank sold to the Treasury to pay debt in foreign currency.{#p-rc_a969d1e2a09f8fba-294}

Arriazu pointed out that the Treasury absorbed excess pesos through debt auctions above maturities, leaving that difference immobilized in the Central Bank. The economist warned that this increase in public deposits is not explained by the fiscal surplus: "It took ARS$18 trillion out of the market", he stated.
Arriazu pointed out that the Treasury absorbed excess pesos through debt auctions above maturities, leaving that difference immobilized in the Central Bank.

Arriazu's Proposal

"I am absolutely in favor of the Government buying reserves ... but not buying reserves at the cost of destroying internal credit," he summarized.

In response to the official argument that credit does not grow because banks do not lend and people do not want to borrow, he replied that "it may be." "But, why should I make it easier for banks?," he posed, referring to the placements of funds by entities in public securities. With the banks' money back in the market, "they will either lend or lower the rate."

His proposal, in this context, is for the Treasury to stop placing debt above what matures and for the BCRA to buy reserves only as demand for pesos grows, without sterilizing.

Arriazu flatly dismissed devaluation as a reactivation tool and criticized that the country always seeks "the quick path" with short-term effects. Instead, he proposed that the real solution lies in applying "the hormone of competitiveness," lowering Argentine costs, reducing labor litigation, compressing country risk to 100 points, and cutting tax pressure to the level of Korea (30%).
Arriazu flatly dismissed devaluation as a reactivation tool. Presidency

Political Risk Ahead of 2027

With the electoral campaign on the horizon, Ricardo Arriazu warned about the impact of political and economic risk. "If I buy reserves at the cost of internal credit, I generate recession, I generate distrust, and I generate next year's run," he warned, questioning the official logic by stating: "Why do I accumulate dollars if I am generating the problem?"

The accumulated reserves will not stop a potential run, according to Arriazu. "The Government can actually pay all the debt, yet people believe it will not pay it. Because what matters is not whether I can pay the debt. What matters is whether I want to pay it," he stated. And he asked the audience: "Do you think that if, for example, Kicillof wins, he will use the reserves to defend the peso?"

Arriazu asked the audience: "Do you think that if, for example, Kicillof wins, he will use the reserves to defend the peso?"

The best electoral indicator in the country, he said, is the trust index in the Government from the Di Tella University. The level is higher than with Macri, Cristina Kirchner, and Alberto Fernández, and lower than with Néstor Kirchner.{#p-1793291164653-19191}

"But look at the trend." People vote out of hope, "and if they are displeased, they vote differently, as they just voted in Brazil." The Government, he added, is still on time.