Benchmark Rate in Argentina
Argentina - Benchmark Rate
Central Bank maintains tight monetary conditions despite plunging economic activity
At its latest meeting held on 11 September, the Central Bank of Argentina (Banco Central de la República Argentina, BCRA) decided to leave the seven-day liquidity bills rate (seven-day LELIQ rate) unchanged at an all-time high of 60.00%. The decision was widely expected by market analysts as the Bank attempts to restore confidence and limit currency volatility by supporting the peso. This follows months of financial volatility and several currency selloffs throughout the second and the third quarters.
According to the National Statistics Institute (INDEC), national consumer prices jumped 3.7% and 3.1% month-on-month in June and July, respectively, influenced by strong pass-through effects from the weak currency. Despite the deceleration in inflation recorded in July, price pressures are deemed to intensify in August and September, due to hikes in regulated prices and FX volatility. Inflation expectations spiked accordingly. Economic activity in Q2 contracted notably due to the delayed impacts of a severe drought in the first quarter, tightening monetary conditions and financial turmoil. GDP in 2018 as a whole is consequently also expected to decline.
In its communiqué, the Bank stated it would not cut rates until at least December and will continue to monitor monetary aggregates. Curbing public spending along the lines of the agreement with the IMF, together with the BCRA’s commitment to no longer finance the Treasury and to reduce the system's excess liquidity, are considered key to containing inflation going forward. However, external risks persist due to a possible reignition of emerging-market financial instability. The Bank therefore stated that it stands ready to take further measures if necessary to tackle inflation.
The next monetary policy meeting is scheduled for 9 October.
Panelists participating in the LatinFocus Consensus Forecast are still taking current events into account. A new Consensus Forecast will be released on 10 September.
Argentina - Benchmark Rate Data
|Benchmark Interest Rate (%)||21.63||20.38||27.25||19.88||23.25|
5 years of economic forecasts for more than 30 economic indicators.
Argentina Benchmark Rate Chart
Source: Argentina Central Bank.
|Bond Yield||6.69||0.15 %||Dec 17|
|Exchange Rate||39.86||0.45 %||Sep 14|
|Stock Market||30,177||2.26 %||Sep 14|
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September 12, 2018
At its latest meeting held on 11 September, the Central Bank of Argentina (Banco Central de la República Argentina, BCRA) decided to leave the seven-day liquidity bills rate (seven-day LELIQ rate) unchanged at an all-time high of 60.00%.
September 4, 2018
Industrial production contracted 5.7% over the same month of last year in July, according to data released by the National Statistical Institute (INDEC) on 4 September.
August 24, 2018
The Universidad Torcuato di Tella (UTDT) consumer confidence index was stable in August from July at 36.3 points, and just a notch higher than June’s four-year low.
August 23, 2018
The monthly indicator for economic activity (EMAE, Estimador Mensual de Actividad Económica) contracted 6.7% in annual terms in June, deteriorating from the 5.2% contraction recorded in May (previously reported: -5.8% year-on-year) and marking the worst performance in nine years. June’s contraction came on the back of significant annual declines in agricultural and industrial output, as well as severely restricted trade activity.
August 22, 2018
Exports rebounded in July, expanding 1.7% in year-on-year terms following June’s revised 1.0% contraction (previously reported: -1.4% year-on-year).