Argentine central bank lowers reference rate to 50% annually

Buenos Aires. The central bank of Argentina (BCRA) lowered the reference rate to 50 percent annually from the previous level of 60 percent, due to expectations of a decrease in the high inflation suffered by the country.

“The BCRA’s decision is taken into consideration of the financial and liquidity context and is based on the rapid adjustment of inflation expectations, the strengthening of the fiscal anchor, and the contractionary monetary impact derived from the seasonality in the Treasury’s external payments. of the current quarter,” the monetary authority said in a statement.

The BCRA had lowered this reference rate by ten points last week, as it also did in mid-April.

Last December, with the previous administration, the reference rate was 133 percent annually, cut to one hundred percent with the current government, then other reductions were made: on April 11 the monetary authority lowered it from 80 to 70 annual percent; on April 25 from 70 to 60 percent and a week later it lowered it to the current 50 percent.

“It is a surprise that the (central) bank has lowered the rate again, this was expected before the next Treasury (bill) tender, but apparently (they) see very low inflation levels compared to the first quarter,” commented an operator from the money desk of a foreign bank.

This yield is the basis with which the country’s financial system is managed and is a mechanism to adjust liquidity between banks.

President Javier Milei, who assumed the presidency on December 10, seeks to put the country’s economy back on track by defeating inflation of more than 200 percent annually and balancing fiscal accounts.

According to private specialists, the inflation rate would be in single digits in April, compared to a level of 25.5 percent recorded in December, after the abrupt devaluation of the peso decided by Milei.

With editorial information