By the late eighteenth century, the British controlled the Caribbean and were blocking the Lima sea routes, so it was vital that another route to the silver mines of Potosí be established. The River Plate seemed the logical choice, and the growing value of Buenos Aires both as a market and strategic post gained the recognition of the Crown when it was made the capital of the new Viceroyalty of the River Plate , created in 1776, and whose jurisdiction included Upper Peru (modern Bolivia), Paraguay, and the Governorship of Montevideo. With power concentrated in Buenos Aires, it came, increasingly, to dominate the interior. Commercial restrictions were gradually loosened, permitting trade with other ports in Spain and Spanish America, but the Crown still tried to hang on to its monopoly on colonial commerce and prohibited the sale of silver to foreign powers. Tension between monopolist traders and those who advocated liberal free trade was becoming more entrenched. During the European wars of the late eighteenth cent ury, the mother country was unable to guarantee a steady supply of manufactures to its empire, and the Crown was forced to loosen its monopoly in 1797, allowing its colonies to trade with neutral countries. To the dismay of monopolist merchants, cheap European manufactures flowed freely into the city courtesy of contraband merchants using the cover of neutral ships to import enemy goods. Monopolists trading on the traditional Cádiz route suffered from this, and exports to Spain dipped from millions of pesos to a mere 100,000 in 1798. However, once lifted, it became increasingly difficult to reinstate monopolist restrictions, and attempts to do so caused anger amongst those, such as the merchant Manuel Belgrano , who argued for free trade with all nations, but not rebellion against the Crown. Although the progressive ideas of the French Revolution and the American Declaration of Independence circulated among the elites of Buenos Aires, there was not yet any significant form of revolutionary feeling against the Spanish authorities.

Other changes in the economy of Buenos Aires became increasingly apparent during the Viceroyalty. Rich merchants ( comerciantes ) helped to finance the growth of estancia livestock farms in the province: a shift away from the earlier practice of vaquerías - round-ups of wild cattle. By the end of the eighteenth cent ury, these estancias had become highly profitable enterprises. Bolstered by immigration from peninsular Spaniards and Creole Spanish Americans from the interior, the city's population reached 42,540 by 1810 (up from less than 9000 in 1744). Despite the increased importance of the region, the territory that has come to be Argentina was still sparsely populated at this time, though, and, as late as 1810, half of its estimated 360,000 inhabitants were indigenous Amerindians.