Bank of Argentina raises interest rates again

The board of directors of the Central Bank of the Argentine Republic raised the yield of the Liquidity Letters (Leliq) to 28 days, the reference rate in the country for the price of money, by 200 basic points, from 47 % to 49 %, as reported in a statement.

This is the fifth rate hike that the country’s monetary authority has carried out this year, within the framework of the agreement reached with the International Monetary Fund (IMF) to restructure a debt of approximately 45,000 million dollars.

The monetary roadmap undertaken by the central bank, which has already accumulated a rise of 1,100 points so far this year, adheres to a principle of understanding between Argentina and the IMF to have positive real interest rates, in addition to a reconstruction of the public debt market in the local market.

The Consumer Price Index (CPI) of Argentina advanced 6% during the month of April compared to March, while in year-on-year terms the variation was 58 %, according to data published by the National Institute of Statistics and Censuses (INDEC).

Despite registering one of the highest inflationary levels on the planet, the Central Bank of the Republic indicated in its statement that during April “there was a slowdown in the general level of prices with respect to the rise registered in March”, when the CPI climbed a 6.7 % monthly. In this regard, the institution expects inflation in the coming months to continue to decline gradually.

Likewise, the issuing institute points out that the current international financial conditions and the recent behavior of the commodity markets suggest that “some stability in the prices of raw materials” may have been achieved.

K. Tovar

Source: Americaeconomia