Argentina’s Economic Shift: Labor Reform, Dollar Decline, and Market Optimism
Argentina’s economic landscape is undergoing notable changes, marked by the recent approval of labor reforms and a continuing decline in the value of the dollar. These developments, coupled with strategic interventions by the Central Bank, are shaping a new narrative for the nation’s financial future.
Labor Reform Gains Traction
The Argentine Chamber of Deputies has passed the Modernization Laboral bill, with 135 votes in favor and 115 against. This legislation aims to streamline labor regulations and incentivize formal employment, addressing a significant challenge in the country where informal work exceeds 40%. One key change involved the elimination of Article 44, which concerned remuneration during non-work-related illness or accidents.
Experts believe the reform could reduce litigation costs associated with hiring and encourage businesses to formalize their workforce. Ignacio Morales, Chief Investments Officer at Wise Capital, anticipates further progress in the Senate, potentially leading to a session on February 27th to finalize the changes.
Dollar’s Descent and Central Bank Intervention
The official dollar exchange rate continues to fall, reaching $1.376 in the wholesale market – a level not seen since October 14th. This represents a 4.9% decrease in February and a 5.4% decline since the beginning of 2026. The dollar’s retreat is partially attributed to consistent purchases of USD 475.7 million in the cash segment, enabling the Central Bank to maintain its intervention strategy.
The retail dollar closed at $1.395 for sale, the lowest since September 29th. The blue dollar (unofficial market) also saw a decrease, settling at $1.430 for sale, a 6.5% drop in 2026.
Did you know? The Central Bank’s bands for exchange rates currently allow for a 16% margin before reaching the upper limit, the widest range since July 4, 2025.
Market Response: Stocks, Bonds, and Risk Assessment
The S&P Merval index of the Buenos Aires Stock Exchange rose by 1.2% to 2,873,248 points, demonstrating continued investor confidence. IRSA (+8.7%) and ByMA (+7.9%) led the gains. Sovereign bonds in dollars also experienced a 0.7% increase.
Country risk, as measured by JP Morgan, decreased by three units to 519 basis points. This suggests a lessening of perceived risk associated with investing in Argentine debt.
Central Bank Reserves and Future Outlook
The Central Bank’s international reserves have increased to USD 46.261 billion, the highest level since August 25, 2021, following a USD 167 million purchase in the cash market. This boost in reserves provides the Central Bank with greater flexibility in managing the exchange rate and supporting economic stability.
Francisco Díaz Mayer, Head of Operations at ABC Mercado de Cambios, noted the clear downward trend in the currency, driven by consistent selling pressure in the market.
Dollar Futures and Market Activity
Dollar futures contracts also experienced declines, with trading volume reaching the equivalent of USD 1.4042 billion on the A3 Markets platform. Contracts for the complete of February fell by 1% to 1,386.50 pesos.
Frequently Asked Questions
- What is the current status of the Argentine dollar? The dollar is currently experiencing a decline in value, both in the official and unofficial markets.
- What impact is the labor reform expected to have? The labor reform is expected to incentivize formal employment and reduce litigation costs for businesses.
- How are the Central Bank’s interventions affecting the exchange rate? The Central Bank’s purchases of dollars are contributing to the currency’s decline.
- What is the current level of Argentina’s international reserves? International reserves have risen to USD 46.261 billion.
Pro Tip: Keep a close watch on the Central Bank’s reserve levels and future policy announcements, as these will likely influence the direction of the Argentine economy.
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