USD to ARS has always been a macro trade, but Argentina’s latest FX reform turns it into a rule-based trade as well, because the central bank has now spelt out how the band will move and how it plans to rebuild reserves.
From January 1, 2026, Argentina’s central bank will adjust the floor and ceiling of the peso’s exchange-rate band each month based on official inflation, replacing the older “set at 1% per month” system.
At the same time, the central bank has announced a pre-announced reserve purchase programme that is meant to accumulate dollars predictably, rather than relying on ad-hoc intervention.
If you trade USD/ARS, the key shift to understand is that the reform does not eliminate risk, but rather changes where the risk is located.
Argentina’s FX Reform: What Changed and What Did Not
1) The Big Structural Change Began in April 2025
In April 2025, Argentina moved away from a tightly managed system and introduced a floating exchange rate within a band, initially set between 1,000 and 1,400 pesos per $, with the band gradually widening.
This revamp coincided with the IMF’s approval of a $20 billion program, which helped backstop the reform agenda and gave authorities more room to start unwinding long-standing economic controls.
Most currency and capital controls were lifted in April 2025, which helped improve business sentiment and investment conditions.
2) The Day-To-Day Band Mechanics Are Simple, but Powerful
Under the band regime, the central bank’s own framework explains intervention like this:
-
When USD/ARS hits the lower band (a stronger peso), the central bank buys dollars (selling pesos), which increases reserves and adds domestic liquidity.
-
When USD/ARS reaches the upper band (a weaker peso), the central bank sells dollars (buying pesos), pushing back against further peso weakness while absorbing peso liquidity from the system.
This is why the band is more than a line on a chart. It is a liquidity machine.
3) The December 2025 Upgrade: The Band Becomes Inflation-Indexed
The previous framework pushed the band higher by about 1% per month, which became increasingly difficult to defend once monthly inflation was running faster than that. With the crawl lagging inflation, the currency was effectively getting pulled toward the top of the band more often, raising pressure on reserves and intervention.
Under the revamped approach, band adjustments are intended to track official inflation data more closely, so the corridor can move in line with realised price growth rather than falling behind.
The central bank confirmed that, from January 1, 2026, the band will evolve each month at the rate of the latest inflation data reported by INDEC, with a two-month lag (t-2).
Why the two-month lag matters: it makes the system predictable, but it also means the band can feel “behind the curve” if inflation suddenly jumps or falls.
The Key Takeaway
USD/ARS is shifting from “guess the next devaluation” to “price the rules.” For traders, that changes the playbook:
-
You spend less time trying to predict a single shock event.
-
You spend more time tracking inflation prints, reserve behaviour, and where spot sits relative to the band.
Where USD to ARS Stands Now
Argentina’s disinflation story has improved against the 2024 peak, but inflation is still high enough to matter for FX mechanics.
The Central Bank shows:
-
Monthly inflation: 2.5% (November 2025
-
Year-on-year inflation: 31.4% (November 2025)
-
Expected inflation (next 12 months, median): 21.0% (November 2025)
On the FX side, the same official dashboard shows:
-
Wholesale reference rate (A3500): ARS 1,454.92 per $1 (December 29, 2025)
-
Retail average seller: ARS 1,477.22 per $1 (December 29, 2025)
-
Band limits (December 30, 2025): upper ARS 1,526.09 per $1, lower ARS 916.58 per $1
Additionally, the Central Bank reported international reserves of 43,012 (in millions) as of December 23, 2025.
What the New Framework Changes for USD to ARS Traders
| Topic | Old framework (pre-2025) | 2025–2026 framework (now) | Trading impact |
|---|---|---|---|
| Exchange rate structure | Multiple rates, heavy controls | Band-based system, wider access | Cleaner price discovery, fewer distortions |
| Band adjustment | Fixed 1% monthly shift | Shift indexed to inflation (t-2) | Faster “crawl” when inflation is higher |
| Reserves strategy | Often reactive | Pre-announced purchase programme | Less surprise risk, more rule-based flows |
| Intervention intensity | Often opaque | Daily execution tied to market volume | Potentially lower tail risk, but execution matters |
| Controls (“cepo”) | Broad and restrictive | Mostly lifted, some still remain | Residual frictions can still move the market |
1) Inflation Becomes a Direct Input into the FX Regime
If inflation is the “engine” of the economy, it is now also the gearbox for the pair.
As noted earlier, Argentina’s November inflation was 2.5% month-on-month, which is already well above the old 1% monthly band shift. If the band shifts to around 2.5% per month for a sustained period, that implies a much faster annualised glide than the old system.
Derived Maths:
A 1% monthly crawl compounds to about 12.7% over a year, while a 2.5% monthly crawl compounds to about 34.5% over a year (1.0112−1≈12.7%; 1.02512−1≈34.5%). (This is simple compounding, not a forecast.)
That does not mean USD/ARS must rise 34% in 2026. It means the regime is less likely to accidentally engineer an overly strong real peso by keeping the band’s crawl far below inflation for extended periods.
2) Reserve Accumulation Becomes a Tradable Theme
The central bank stated it will launch a pre-announced reserve-buying program on January 1, 2026, with daily purchases initially calibrated to around 5% of FX market volume, and allowing for occasional block purchases as necessary to maintain stability.
It also outlined a base-case framework that ties reserve accumulation to growth in money demand, including a plan to raise the monetary base from 4.2% to 4.8% of GDP by December 2026, an amount it associates with roughly $10 billion in purchases, and potentially up to $17 billion if money demand expands more than expected.
What Traders Should Take From This:
If reserves rise steadily without inflation flaring, the market can price a lower risk premium into USD/ARS, even if the currency still trends weaker over time.
3) The Band Is Becoming the Market’s “Chart”
In most FX pairs, technical analysis is a story of supply and demand. In USD to ARS, the dominant supply and demand factor is often policy rules.
That does not make technical analysis useless. It just changes what “support” and “resistance” mean:
-
Band ceiling becomes macro resistance (it is the level where policy credibility gets tested).
-
The band floor becomes macro support (it is the level where “too strong” becomes the debate).
Reserve-buying rules create a new kind of flow: when the peso is strong and money demand is rising, the Central Bank may be buying dollars, which can slow peso strength and add upside pressure to USD/ARS.
Thus, the cleanest way to trade USD to ARS in 2026 is to treat the band like the higher timeframe structure, then use standard indicators for timing.
How to Trade USD to ARS After the Reform? Practical Guideline
What the Reform Makes Easier
-
You can build plans around clearer rules, because band evolution and reserve purchases are stated in advance.
-
You can focus more on macro drivers, because official and parallel gaps have been reduced compared with earlier years.
What the Reform Makes Harder
-
You may see sharper, shorter bursts of volatility because inflation-indexed bands can widen faster than before.
-
You still need to respect flow controls and market structure because some restrictions remain, and market liquidity can change quickly.
Frequently Asked Questions
1. What Is Argentina’s New Exchange-Rate System for USD to ARS?
Argentina uses a floating exchange rate within a band. Starting January 1, 2026, the band floor and ceiling will move each month in line with official inflation data, with a two-month lag.
2. Why Did Argentina Change the Band Adjustment From 1% to Inflation?
The 1% monthly shift lagged inflation and risked making the peso too strong in real terms. Indexing the band to inflation aims to protect competitiveness and reduce pressure on reserves.
3. Does the Reform Make USD/ARS Safer to Trade?
It can reduce “shock” risk because rules are clearer and reserve buying is planned, but liquidity and policy credibility still matter.
4. What Are the Most Important USD to ARs Levels for 2026?
The band edges are the big ones because they represent policy stress points. The primary resistance area is around ARS 1,526 per $1, whereas the significant support level is close to ARS 917 per $1.
Conclusion
In conclusion, Argentina’s FX reform changes USD to ARS trading by making the rules clearer and by tying the currency band more directly to inflation.
The reserve plan matters just as much as the band plan, because reserves are the credibility anchor that reduces tail risk.
For early 2026, the cleanest approach is to treat USD/ARS as a policy-and-inflation trade: you should watch inflation prints, reserve accumulation, and any moves on the remaining controls more than you watch headlines.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
)
