Monetary Policy in Argentina Under Convertibility, 1991-96

ABSTRACT A conceptual framework to analyze monetary policy might be the relationship “policy goal-operating target-monetary instrument.” Although the discretion of the monetary authorities is severely restricted, this analysis is also applicable to Argentina since 1991. Its monetary regime is governed by the Convertibility Law, which requires the Central Bank to convert the domestic currency into dollars, and by the Central Bank Charter, which prescribes that its “fundamental mission [...] is [...] to maintain the value of the currency.” Five periods were found when the operating targets and monetary instruments were different, while the policy goal of price stability remained unchanged.