January 16th, 2026
1. INDEC released inflation data that will impact the new exchange rate system
This week, INDEC published its Consumer Price Index (CPI) report for December, closing the year with monthly inflation at 2.8% and 31.5% year-on-year. Although it is the lowest level since 2017, it still hasn’t managed to break through the 2% mark, in a context where relative prices continue to recover in areas such as energy, transportation, services, and regulated goods. The division that recorded the highest increase in the month was Transportation (4.0%), followed by Housing, Water, Electricity, Gas, and Other Fuels (3.4%). This is not a minor detail: these sectors will have the greatest impact on the new Consumer Price Index (CPI) basket that INDEC will launch in January. Starting this year, inflation data will also influence another economic variable: the official dollar exchange rate. This is because, under the new exchange rate regime in effect since the beginning of this year, the floor and ceiling of the band are no longer adjusted according to a fixed dynamic, but are updated based on price developments in the economy. Therefore, with this data, the exchange bands will widen from February at a rate of 2.8% per month, which will bring the exchange rate above $1,600 by the end of that month.
2. Signing of the Mercosur-European Union agreement in Asunción: Lula is the only president who will not attend
This Saturday, after months of negotiations, the trade agreement between Mercosur and the European Union will be signed. The meeting will be held in Asunción, the capital of Paraguay, and although the heads of state will not formally sign the agreement, several leaders have already confirmed their attendance. Argentina will be represented by President Javier Milei and Foreign Minister Pablo Quirno, as Paraguay takes over the pro tempore presidency of Mercosur, led by Santiago Peña, considered a strategic ally of Argentina in the region. Uruguayan President Yamandú Orsi has also confirmed his attendance. Meanwhile, Brazilian President Luiz Inácio Lula da Silva has confirmed that he will not attend the meeting, despite having expressed interest in accelerating the signing of the agreement during his pro tempore presidency. In this context, and following the arrest of Nicolás Maduro in Venezuela, relations between Brazil and Argentina have deteriorated further, to the point that Brazilian diplomatic circles say they are at their worst. Discord has been growing due to multiple posts on social media by the Argentine president that have reportedly worn down his Brazilian counterpart. On the European side will be the president of the European Commission, Ursula von der Leyen, and the president of the European Council, Antonio Costa. The agreement includes economic and legal facilitation for the transaction of goods between the two continental blocs and represents the formation of the world’s largest trading bloc. That is why it is being called a “historic agreement.” Finally, barring any delays, it is expected to come into force at the end of 2026.
3. Davos, EU-Mercosur, and the political table: Milei’s key agenda
In the coming days, President Milei will embark on a series of trips, ranging from the Cordoba town of Jesús María to the Davos Economic Forum, with a stopover in Asunción, Paraguay, where he will attend the signing of the European Union-Mercosur agreement. Milei’s first trip will be to the town of Córdoba to attend the horse breaking and folklore festival, with the aim of continuing to bolster his image in an electoral stronghold such as the Mediterranean province. After this, and his visit to Paraguay, the president will attend the Davos Forum for the third consecutive year, where he not only seeks to meet with various international leaders, but also intends to give a speech that will generate repercussions, as in previous years. Donald Trump will also attend the event, and expectations are growing for a bilateral meeting with the US president, although the Casa Rosada has assured that the meeting has not yet been confirmed. Prior to all this, and without Milei’s presence, a political meeting was held today that brought together his closest circle. The committee was made up of Chief of Staff Manuel Adorni; Minister of Economy Luis Caputo; presidential advisor Santiago Caputo; Lower House leader Martín Menem; La Libertad Avanza Senate leader Patricia Bullrich; Minister of the Interior Diego Santilli; and Secretary of Strategic Affairs Ignacio Devitt. The meeting will seek to define the legislative strategy to address this summer’s objectives, particularly labor reform.
Ámbito: Javier Milei activa frenética gira de verano: Córdoba, Paraguay, Davos y Mar del Plata
4. Labor reform: Santilli continues touring the provinces while the technical committee in Congress begins its work
Interior Minister Diego Santilli continues to tour the provinces as part of a round of talks with governors, which the government is promoting ahead of the legislative debate on labor reform. In line with this, the minister visited Chaco last Monday to meet with Governor Leandro Zdero, who supported the idea of moving forward with the reform. Yesterday, he first met in Mendoza with Governor Alfredo Cornejo, an ally who has already expressed his support for the reform but has called for a tougher text, and then traveled to San Juan, where he met with provincial leader Marcelo Orrego. The weekly agenda ends today at noon, when Santilli will meet with Sergio Ziliotto, governor of La Pampa, at the Casa Rosada to negotiate the support of an opposition leader who is willing to engage in dialogue. As part of his tour of the provinces, Santilli’s second planned visit to Chubut has been postponed. Meanwhile, Senator Patricia Bullrich (LLA) announced that between January 16 and 26, a technical-political space will be set up in the Senate, coordinated by one of her main advisors, lawyer Josefina Tajes, to gather input and reach consensus on amendments to the Labor Reform bill approved in December.
elDiarioAR: Tras las reprogramaciones, Santilli viaja a Mendoza y San Juan y reactiva la gira federal
5. Record purchases by the BCRA, IMF endorsement, and high rates reshape the foreign exchange market
On Wednesday, the Central Bank made its largest purchase of foreign currency since the lifting of exchange controls: it added US$187 million in a single day and racked up eight consecutive trading sessions with a net purchase balance in the foreign exchange market. This result accelerated the process of accumulating reserves and resulted in the highest net positive balance in the last ten months. However, the impact on international reserves was limited due to payments of around US$100 million to international organizations. In this context, International Monetary Fund spokesperson Julie Kozack stated: “Although the process is still in its early stages, reserve accumulation has started the year at a faster pace than expected,” and confirmed that a technical mission from Washington will arrive in February to carry out the second review of the current agreement. In this context, the market expects the IMF to grant a waiver (an exemption for non-compliance with the target), a possibility widely anticipated by economic analysts. On the other hand, this week’s decline in the dollar was influenced by the Treasury’s debt rollover, which required it to validate rates of up to 49% per annum, more than double the inflation projected by the market for 2026. This yield increased the attractiveness of peso-denominated instruments, displacing demand for dollars.
Clarín: El Banco Central compró US$ 187 millones y el dólar cayó a $ 1.480