Argentina: Central Bank stands pat in October
November 4, 2022
On 20 October, the Central Bank of Argentina (BCRA) decided to keep the LELIQ rate unchanged at 75.00%, deeming the current level of the LELIQ rate sufficient to support the peso and limit inflation and inflation expectations.
The Bank stood pat on the basis that core inflation data for September turned out better than expected, with the month-on-month variation standing at 5.5%, lower than the 6.2% month-on-month increase in headline inflation. Meanwhile, annual inflation spiked to 83.0% in September from 78.5% in August. Argentina’s monetary policy is framed in an agreement with the IMF; the country has committed to moving gradually towards positive real interest rates.
Looking ahead, the Bank did not give explicit guidance but stated that it will use the levers of interest rates and money aggregates in order to curb inflation and prevent excessive financial volatility.