The BCRA cut the reference rate to the lowest level in three months and was below 60%



In a measure consistent with the elimination of the 60% floor for the reference rate, the central bank cut the Resulted at 59.1% per year, the lowest since the end of August. In just two months Cut 14 points Percentage of 73.5% on October 8.

The entity carried out an auction letter of liquidity (LELIQ) To 7 days by $ 177,040 million, Compared with maturity at this day for 140,075,000 pesos.

With this Absorption of $ 36,965,000 This Wednesday, the monetary entity carries LELIQ has been featured on $ 392,936 million since the beginning of October, When he began using the rate of the exclusive letters for banks as reference for the financial market.

The Lelicular stock operates $ 720,000 million, a 57% of which the Monetary Base adds (Bills and coins in circulation, checks for settling and current account deposits), whose monthly average was $ 1.256 million in November, according to the latest report on Monitoring the Monetary Base of the Bureau.

The expected data this Wednesday is that of the Fall in total yields below 60%, After the central bank's decision to eliminate the current floor level for interest rates in the face of a significant drop in inflation expectations for two consecutive months.

The The average cut rate was 59.102%; The minimum rate was adjusted to 56.998%, and the maximum was awarded at 59.744% annually.

"If the rate does not start to fall, the economy will not start", Explains the economist Horacio Larghi, Analyst at the consulting unit Mica, and noted that "break the 60% barrier and show a downward trend Changes the expectation of the investors"

The reference yields are those Lower than 45% per annum on August 29 Of this year.

"The Interest rate is expected to wear May-June As inflation goes down to companies, in particular, SMEs Such a high interest rate is a distortion factor What Complicates the range of payments and financing. Credit in general is very low in terms of GDP, "he stressed. Eduardo Frucci, Senior Researcher at the University of the Australian University.

According to the market expectations (REM) From November, the market forecasts that the monetary policy rate will show a gradual reduction of December 2018 until Reach 35% in December 2019.

The Higher rate of exchange rate, After two years in which the value of the dollar has fallen behind, increasing at a rate lower than that of inflation, forced the monetary authority to raise drastically the interest rates, which They double the 28.75% annual in which they started in 2018.

"In October and November, the BCRA Exceeded the lens of monetary bases (BM). The monthly averages of the WB are 19,000 and 15,000 million pesos less than those Aim of 1.271,000 million "The BCRA said in a statement, the Monetary Policy Committee of the Entity said it would continue to deal with caution in the coming months.


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