Money in Argentina
Argentina - Money
Argentina’s Central Bank continues its easing cycle in August
On 30 August, the Central Bank of the Argentine Republic (BCRA) cut the 35-day Lebac interest rate by 50 percentage points from 28.75% to 28.25%. As a result, the policy rate now stands at its lowest level since it was introduced for the first time in December of last year. This is the fifth consecutive time in one month that the Bank has cut the policy rate, reflecting confidence that inflationary pressures are slowly decreasing. The move aims to make the Central Bank’s short-term notes less attractive in order to inject more money into the economy.
In its brief press release, the Bank commented that estimates from both public and private sources suggest that inflation decreased in August. However, the Bank also acknowledged that its capacity to accelerate monetary easing is limited by the fact that inflation expectations for next year remain above the BCRA’s inflation target range. For the last quarter of this year, the Bank targets a monthly variation in consumer prices at or below 1.50%. Analysts at JPMorgan expect the Bank to maintain a cautious stance:
“We concur on the premise, and therefore, we believe the central bank will continue to maintain a cautious stance, keeping positive ex-ante real rates north of 4% in order to consolidate dis-inflation process. We expect inflation stickiness to mount when reaching levels around 20%, given both the institutional price setting framework (e.g., wage negotiations based on trailing inflation), as well as the fiscal imbalance that we believe will also be hefty next year […]. Thus, BCRA would need to resort to even higher ex-ante real rates in its quest to drive inflation to its targets (17-12% for 2017, and 12-8% for 2018).”
Participants in the LatinFocus Consensus Forecast see the 35-day Lebac rate ending 2016 at an average of 27.0%. Panelists see the 35-day Lebac rate ending 2017 at an average of 21.7%.
Argentina - Money Data
|Money (annual variation in %)||29.8||38.4||25.7||28.9||28.2|
5 years of economic forecasts for more than 30 economic indicators.
Argentina Money Chart
Source: Argentina Central Bank and FocusEconomics calculations.
|Bond Yield||6.69||0.15 %||Dec 17|
|Exchange Rate||15.17||0.03 %||Sep 23|
|Stock Market||16,442||-1.21 %||Sep 23|
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September 26, 2016
In August, consumer prices in the greater Buenos Aires capital area increased 0.2% over the previous month, according to recent data published by the National Statistics Institute (INDEC).
September 23, 2016
In September, the Universidad Torcuato di Tella (UTDT) consumer confidence index improved from the previous month’s reading of 42.6 to 43.3.
August 30, 2016
On 30 August, the Central Bank of the Argentine Republic (BCRA) cut the 35-day Lebac interest rate by 50 percentage points from 28.75% to 28.25%.
August 25, 2016
In August, the Universidad Torcuato di Tella (UTDT) consumer confidence index decreased from the previous month’s reading of 45.6 to 42.8.
August 24, 2016
In July, exports dropped 10.9% over the same month last year, which followed the 12.9% decrease observed in the previous month.