He central bank of Argentina (BCRA) raised its reference interest rate this Thursday by 300 basis points to 81% due to the inflationary escalation registered in March, the entity reported in a statement.
The increase is the second in a row, since in March the BCRA raised the yield of the so-called “Leliq” bills from 75% to 78%, after five months of stability.
Reuters had earlier reported, citing four sources, that a possible hike was on the agenda for the weekly meeting of bank directors, who have come under pressure to raise the rate in a bid to rein in soaring inflation.
He Consumer’s price index (CPI) of Argentina rose 7.7% in March and 104.3% in the last 12 months, while analysts consulted by the central bank of Argentina They project inflation of 110% for this year.
“The BCRA will continue to monitor the evolution of the general level of prices, the dynamics of the exchange market and the monetary aggregates for the purpose of calibrating its rate policy,” the entity said in the statement.
With the new reference rate, the central bank of Argentina This Thursday, it placed Leliq liquidity bills for 1.0 trillion pesos, operators commented.
As of the increase, the rate of one-day passive repo operations went to 75%, while the one-day active repo rate went to 100%, reported market sources.
Uncertainty about the future of the third largest economy in Latin America, with high inflation, scarce foreign reserves and a historic drought that affected exports, is hitting the local currency, with a peso that fell to 218 units on Thursday per dollar in the official market.
With strict capital controls, the gap between the price of the peso in the official market and in the parallel markets is widening.
In the so-called “blue” market, the peso weakened almost 4% on Thursday to an intraday record low of 440 per dollar, approximately double the official price.
Given the search for savings in hard currency as protection against inflation, the bank reported that to encourage savings in pesos it raised the minimum interest rate limits on fixed terms, taking them to 81% per year for deposits of up to 10 million pesos and 72.5% for the rest of the fixed terms.
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