Argentina’s Central Bank will start to let its interest rates be defined by “supply and demand,” the monetary authority’s vice president, Vladimir Werning, announced. He also claimed that April’s inflation rate, which will be published on Wednesday, will be lower than the figures posted in March.

“The regime foresees the determination of interest rates by supply and demand,” Werning said on Monday at the Annual Congress of the Argentine Institute of Financial Executives (IAEF). He contrasted the upcoming scheme to “an inflation targeting scheme, where the interest rate is calibrated by the Central Bank.”

During his speech at the conference, Werning said that the high-frequency price indicators of the first weeks of May monitored by the Central Bank and economic consulting firms “suggest that the downward trend of inflation in April is reinforced in May.” According to the Central Bank’s monthly market expectation survey (REM, by its Spanish initials), banks and consulting firms are expecting a 3.2% inflation rate in April, lower than the 3.7% in March. Experts at the time in March had expected a 2.6% monthly inflation rate, more than one percentage point lower than the true figure.

Werning also said that the monetary authority is going to seek another repo with international banks, which will add to the US$1 billion deal that the Central Bank took in January. Repos, short for repurchase agreements, are a form of short-term borrowing mainly used by governments. They involve one market participant — in this case, the Argentine government — selling a security to another, then buying it back at a higher price at an agreed future date.

This was the plan he presented to accumulate international reserves without resorting to buying U.S. dollars while the exchange rate is above the currency band.

The currency band scheme, part of an agreement Argentina reached with the International Monetary Fund (IMF), implies allowing the dollar to float between AR$1,000 and AR$1,400. The Central Bank only buys or sells dollars to manage the exchange rate if it reaches these limits. The deal allows the monetary authority to buy dollars when the exchange rate is within the threshold, but the government decided not to.

According to Werning, 2025 will be considered “a transcendental year in terms of structural economic progress, and not one where the elections compromise those important decisions.”

Like economy minister Luis Caputo said when he announced the deal with the IMF, Werning reaffirmed to the conference how the government is in the “stage three” of its economic plan. “Stage three inaugurates a period in which we think opportunities predominate over risks and expectations are extended,” he said. “It constitutes a transition to an ambitious stabilization program, towards a sustainable growth program based on a functioning competition regime and palpable economic freedom.”