Blue Dollar Burns, Inflation Surprises, and Government Eliminates Procrear

Argentina is experiencing a period of high economic tension on June 9th: the blue dollar is trading at a high rate, inflation in Buenos Aires City in May was 1.6%, fueling official expectations, and the government formalized the dissolution of the Procrear trust fund.

The Argentine economy is experiencing a day of particular attention this Monday, June 9, with the foreign exchange market once again in the spotlight. The blue dollar, the main benchmark for the informal market, has shown an upward trend during the first hours of trading. It opened the day at $1,180 for sale, representing an increase of 15 pesos compared to the previous close, and continued its rise by midday, reaching $1,185. This increase of 20 pesos on the day has savers and investors on edge. Meanwhile, the official dollar remained stable, trading at $1,200 for sale and $1,150 for purchase on the Banco Nación (BNA) trading boards. The so-called financial dollars also traded relatively steadily: the dollar settled with liquidation (CCL) was trading around $1,196.2, while the MEP or stock market dollar was at $1,193.1. The gap between the official dollar and parallel exchange rates remains a constant factor in analysis, reflecting the pressures and expectations regarding the currency's future.

Below is a summary of the main dollar quotes in Argentina around 2:00 p.m. on June 9, 2025:

The evolution of the blue dollar is closely followed by Argentines, as it is considered a sensitive indicator of social and economic sentiment, as well as confidence in government policies.

On the inflation front, a key piece of data emerged from the Autonomous City of Buenos Aires (CABA). The Consumer Price Index of the City of Buenos Aires (CABA) registered a 1.6% increase in May, the lowest monthly figure since June 2020. With this data, cumulative inflation in the first five months of 2025 in CABA stood at 12.9%, while the year-on-year variation (last twelve months) reached 48.3%. The items that most boosted the Buenos Aires index in May were restaurants and hotels, clothing and footwear, housing, water, electricity and gas, transportation, and healthcare. In contrast, seasonal components, such as fruits and vegetables, showed a decline, which helped moderate the overall index. This data from CABA fuels the expectations of the National Government, which anticipates nationwide inflation for May below 2%. President Javier Milei himself has publicly stated this projection. Various private consulting firms also estimate figures in this range, with projections ranging from 1.8% to 2.1% for the national index for May. Analysts attribute this marked slowdown to factors such as the exchange rate stability of recent months, the government's fiscal surplus, lower monetary issuance, and the reduction of some taxes.

If this inflationary slowdown trend is confirmed at the national level, it could be interpreted as a significant political turning point for the Milei administration. However, the sustainability of this decline in the long term is a matter of debate. The stability achieved through strong fiscal adjustment and a currency anchor could be temporary if not accompanied by a genuine productive reactivation and a recovery of investor confidence that drives economic growth. Construction, for example, is a sector that "has not yet recovered," according to recent reports, suggesting that overall economic activity still faces challenges.

"The government anticipates that [May inflation] could be less than 2%, something that hasn't happened since July 2020. If confirmed, it would be the lowest monthly inflation in five years (not counting the pandemic period)."

In another measure with a significant economic and social impact, the National Government formalized this Monday the dissolution of the trust fund for the Procrear program (Argentine Bicentennial Credit Program for Single-Family Housing). The decision was made official through Resolution 764/2025, published in the Official Gazette. The Procrear program, created in 2012 during the presidency of Cristina Fernández de Kirchner, offered state-subsidized credit lines to facilitate access to housing for thousands of Argentine families. The current government's justification for its dismantling is that financing housing construction is an activity specific to commercial banks, both private and public, and that direct state intervention in this area is unjustified. Regarding the disbursement of loans already granted, the resolution establishes that the Mortgage Bank, which acted as the program's trustee, will continue to manage these individual loans until their full liquidation, under the same compensation conditions originally established. As for the real estate assets that were part of the fund and are not subject to current construction leases, they will be transferred to the State Property Administration Agency (AABE).

The dissolution of Procrear represents a paradigm shift in Argentine housing policy. It moves from a model with strong state intervention and direct subsidies to one where the market, through commercial banks, assumes the leading role. This shift could have significant distributive consequences, potentially hindering access to housing for lower-income groups who relied on Procrear's favorable conditions. In the medium term, this measure could also reshape the real estate market and the construction sector, whose activity, as mentioned, already faces a complex outlook.

The economic day in Argentina was also marked by other relevant news. It was learned that the government achieved a historic fiscal surplus, explained by spending cuts and exceptional contributions. In the energy sector, YPF announced the import of two of the "world's largest" liquefied natural gas (LNG) tankers for the export of Vaca Muerta gas. Meanwhile, a precautionary measure halted the transformation of the Banco de la Nación Argentina (BNA) into a public limited company, as part of an action promoted by the bank's employees. These various measures and economic data create a "shock" scenario with mixed results. While the government celebrates the drop in inflation and the fiscal surplus, signs of recession persist in some sectors such as construction, and there is growing social uncertainty regarding the future of employment and access to basic goods such as housing. Consumption, according to some reports, is "at two speeds," suggesting that the benefits of stabilization are not being distributed evenly throughout society. This complex panorama generates an intense debate about the costs and equity of the ongoing economic adjustment.