Benchmark Rate in Argentina
Argentina - Benchmark Rate
Central Bank intervenes to palliate economic slump from coronavirus in March
In two subsequent decisions on 19 and 26 March, the Central Bank of Argentina (BCRA) adopted measures to improve the payment chain and to boost credit to SMEs, as part of efforts to ameliorate the economic impact of Covid-19 lockdown measures. However, available evidence suggests the BCRA’s efforts are struggling to translate into an increase in credit.
In March, the Central Bank announced its decision to lower reserve requirements for those commercial banks that granted special credit lines to households and SMEs at a maximum interest rate of 24.0%—well below the key monetary policy rate of 38.0%. The special credit lines should be extended to SMEs principally with the aim of paying workers’ wages. Moreover, the Bank temporarily loosened bank provisioning needs and bank loan classification rules, to further support the flow of credit and thus prevent business closures. However, available data shows that commercial banks are largely placing additional money in Central Bank reserves instead of converting it into loans to businesses. Therefore, the notable increase in monetary base recorded in the last few weeks appears not to be having the desired effects, as the credit channel is damaged also due to a high repayment risk.
Looking ahead, it remains uncertain whether the combination of lower interest rates—on 5 March, the Central Bank set a new lower floor for the LELIQ rate at 38.0%—and looser credit rules will prove effective to alleviating the economic damage inflicted by Covid-19 containment measures or whether they will simply fuel inflation. Lower interest rates and an expanding monetary base could put pressure on the peso and stoke price pressures.
FocusEconomics analysts are still taking the latest economic developments into account.
Argentina - Benchmark Rate Data
|Benchmark Interest Rate (%)||27.25||19.88||23.25||49.50||40.31|
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||59.88||0.45 %||Dec 30|
Get a sample report showing our regional, country and commodities data and analysis.
Request a Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
July 8, 2020
The Universidad Torcuato di Tella (UTDT) consumer confidence index rose to 39.5 in June from a one-year low of 38.4 in May amid protracted containment measures.
July 7, 2020
Industrial production dived 26.4% year-on-year in May, following May’s record-sharp 33.4% year-on-year plunge.
June 29, 2020
Economic activity decreased 26.4% year-on-year in April (March: -11.5% yoy).
June 26, 2020
Exports tumbled 16.3% in year-on-year terms in May, following April’s sharper 18.9% dive.
June 24, 2020
Economic activity in the first quarter slumped 5.4% year-on-year, following Q4’s softer 1.1% drop, according to the Statistical Institute (INDEC).