Benchmark Rate in Argentina

Argentina Benchmark Rate | Economic News & Forecasts

Argentina - Benchmark Rate

Central Bank introduces a temporary tweak to monetary-base target and extends lower floor for LELIQ rate

At its latest meeting held on 22 July, the Central Bank of Argentina (BCRA) stated it will temporarily adopt a two-month-average compliance assessment for the monetary base objective, rather than a monthly one, to adapt the monetary policy framework to the volatility of money demand. At the same time, the BCRA extended the temporary floor for the LELIQ rate it introduced on 1 July until mid-August, in order to continue its fight against inflation.

The BCRA observed that the expected peak in demand for money in July, due to the southern hemisphere winter vacation, actually materialized. Therefore, the Bank decided to temporarily move to a two-month evaluation of the fulfillment of the monetary base in the July-August period, in order to avoid an excessive tightening of the monetary policy stance in July followed by a relaxation in August—when demand for money traditionally moderates. To ensure that this change does not translate into an excessive loosening of monetary conditions, the Bank extended the 58.0% floor for the LELIQ rate introduced on 1 July, until July’s inflation figures are published on 15 August.

Starting 1 October, as stipulated in the standby agreement with the IMF, the Bank adopted a rigid monetary rule which sets monthly growth for the monetary base at 0%. As part of the agreement, the Central Bank also adopted an FX regime which combines a free-floating range for the peso while preventing excessive ARS/USD fluctuations. Given that the Bank will continue to limit growth in the monetary base, inflation should subsequently moderate, while LELIQ interest rates should edge down.

FocusEconomics analysts see the LELIQ rate ending 2019 at 53.34%, thanks to tight monetary conditions, and 2020 at 34.43%.

Argentina - Benchmark Rate Data

2013  2014  2015  2016  2017  
Benchmark Interest Rate (%)21.63  20.38  27.25  19.88  23.25  

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Argentina Benchmark Rate Chart

Argentina Interest Rate
Note: Deposits 30-59 days in %
Source: Argentina Central Bank.

Argentina Facts

Bond Yield6.690.15 %Dec 17
Exchange Rate43.880.45 %Jul 31
Stock Market42,0582.26 %Jul 31

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