In the intricate Argentine economic board, where each movement reverberates with unpredictable consequences, the recent transformation of Federico Sturzenegger From the end of its delegated faculties it represents a critical challenge for Luis “Toto” CaputoMinister of Economy, in their struggle to keep the dollar in the lower half of the exchange band.
This scenario, which combines internal tensions, international pressures and a fragile economic context, puts in check the strategy of Caputo and threatens to destabilize the delicate balance held by the monetary policy of the Government of Javier Milei.
Federico Sturzenegger, Minister of Deregulation and Transformation of the State, has experienced A remarkable metamorphosis in recent months and will do it much more from now. After a period of relative silence, its influence –originally under the radar – has grown up, consolidating itself as the star advisor of President Milei and a fervent defender of economic liberalization but also of exchange flotation.
His vision, aligned with the classic recipes of the International Monetary Fund (IMF), advocates eliminating restrictions such as exchange rate and allowing the dollar to find its value in a free market, without interventions from the Central Bank. This position, which Sturzenegger already defended during his management at the head of the BCRA under Mauricio Macri, clashes frontally with the approach of Luis Caputo, who prefers a stricter control of the exchange rate to anchor inflationary expectations.
The turning point came with the removal of the exchange rate in April this year, announced by Milei and Caputo, but enthusiastically celebrated by Sturzenegger, who compared it to the “fall of the Berlin wall.” Through a DNU, Sturzenegger repealed regulations that restricted the operation of exporters, racing the path to a more open economy. However, this liberalization has generated pressures on the exchange rate, which Sturzenegger considers necessary to correct distortions, but that Caputo sees as a threat to his stabilization plan.
The end of super powers: a corset for deregulating ambition
The Expiration of the delegated powers granted by the Base Law Mark a point of no return. These powers allowed Sturzenegger to advance with structural reforms, from cuts in organizations such as INTA and INTI to national road restructuring, among many other measures. However, with the expiration of these “super powers”, their ability to impose unilateral changes is restricted, forcing it to negotiate with a fragmented congress and with governors increasingly reluctant to yield resources.
This limitation not only slows Sturzenegger’s agenda, but also It exposes Luis Caputo to greater pressures. Without the “chainsaw” of Sturzenegger to reduce large -scale public spending, Caputo faces the challenge of sustaining the primary fiscal surplus – clarifies for credibility to the IMF – in a context of recession and fall in collection. We must add to that the recent rebellion of the governors, which this week will be even more evidenced. In other words, the absence of deep reforms increases the dependence of Luis Caputo in financial maneuvers, such as the absorption of pesos via instruments of the BCRA, to avoid a exchange run that pushes the dollar towards the roof of the band ($ 1,400).
The battle for the dollar and a Luis Caputo on the tightrope
The exchange band scheme, implemented in April 2025 with Limits between $ 1,000 and $ 1,400was designed to grant flexibility at the exchange rate while inflation under control was maintained. Luis Caputo, backed by the president of BCRA, Santiago Bausili, has prioritized that the dollar stays close to the band of the band, although now it remains very close to $ 1,300.
Originally, the government’s plan was that The dollar remained in the $ 1,100 area to avoid a transfer at prices that triggers inflation. However, this strategy requires a constant intervention of the BCRA, which at some point has squandered reservations to sustain the exchange rate and has now added a great intervention in the future dollar -in contracts there are already about US $ 3,980 million open interest from July to December -an approach that Sturzenegger criticizes as unsustainable.
The IMF, in tune with Sturzenegger, has pressed for a more flexible exchange policy, suggesting that the dollar should approach $ 1,300 to encourage export settlement and strengthen reserves. This Ideological discrepancywhich refers to tensions between the two during the Macri government, is aggravated by the perception of Sturzenegger IMF as a more reliable interlocutor, in contrast to Caputo, seen as a “rudimentary financier.” The recent absence of Caputo at a CYCP lunch, replaced by Sturzenegger, reinforces the narrative of a weakened Minister of Economy, unable to articulate responses to business uncertainty.
An explosive cocktail: recession, IMF and internal tensions
The economic context does not help. The recession, which the IMF forecasts more prostates than expected by the Government, limits consumption and collection, reducing the margin of Caputo maneuver. The exchange gap, although diminished, remains a focus of tension to be taken, and global volatility – exacerbated by factors such as Trump’s tariff warfare – accelerates the loss of reserves. In this scenario, Sturzenegger’s insistence on a free flotation threats unleashing a devaluation that Caputo seeks to avoid at all costs.
The internal tensions between both ministers, dating from 2018 when Caputo displaced Sturzenegger of the BCRA, add a personal component to the dispute. While Sturzenegger is emerging as an ideologist aligned with Milei and the IMF, Caputo struggles to maintain control of economic policy, but his “still dollar” strategy erodes in the absence of currency and the growing skepticism of the markets.
Source: Ambito
