Capital flight dropped to $60mn in January the lowest in almost a decade

The net formation of external assets of Argentine residents, known as 'capital flight', was $60 million in January, the lowest level in almost a decade, according to the last exchange balance of the Central Bank (BCRA). The 'services' account registered a currency outflow of $26 million, a sharp reduction compared to $686 million in the same month of 2019. Argentina capital flight broke the historical record in 2018 with an outflow of $27.3 billion that year.

Central bank lowers interest rate to 40%, 23 points in two months

Argentina’s central bank (BCRA) cut to 40% from 44% the benchmark interest rate (Leliq), the seventh time in 70 days since president Alberto Fernández took office in December. “The decision was taken based on the deceleration in the inflation rate, and the prospect of this trend continuing,” the bank said in its statement. On another resolution the BCRA put a cap of 55% to credit card interest.

Public debt climbed to 91% of GDP the highest level in 15 years

Argentina national gross public debt in December amounted to 91% of the Gross Domestic Product, the highest level of the last 15 years (since 118.1% of 2004), according to the Central Bank Monetary Policy Report. The national public debt stock at the end of December rose to $323.2 billion, of which 60% was concentrated in public securities, 25% in loans and 10% in short-term instruments, the report said.

Private banks down loan rate to SMEs from 40% to 35%

Private banks in Argentina will begin to apply from today a reduction from 40% to 35% on their credit rates for micro, small and medium enterprises. The change occurs after the Central Bank (BCRA) imposed 35% as a new credit ceiling that must be approved by banks that want to access the discount of up to two points in their reserve requirements. Public lenders such as Banco Nación already offer a subsidised rate of 27.9%.

Central bank cuts benchmark rate to 44%

Argentina’s central bank (BCRA) lowered its benchmark interest rate to 44% from 48% on Thursday, as a result of a deceleration in inflation, it said in a statement. This is the sixth time that the BCRA has reduced the interest rate since December when it was 19 percentage points above. Earlier, the National Institute for Statistics and Census (Indec) reported that inflation slowed down in January by 2.3%.

BCRA cuts benchmark rate for 5th time since December to 48%

Argentina's Central Bank (BCRA) lowered the benchmark interest rate floor (Leliq) to 48% from a previous 50%, the fifth cut in under two months aiming at overcoming recession and lowering inflation. In that period Leliq has been lowered by 15 percentage points. Banks have been responding positively with loans to SMEs below expected inflation and personal credit lines with rates of around 45%.

Central bank announces new policy guidelines

Argentina’s central bank (BCRA) released policy guidelines aimed at increasing the monetary supply, avoiding major exchange rate fluctuations, and reducing inflation. The monetary policy will support a managed exchange rate float to avoid sharp fluctuations in the value of the currency and will promote a “prudent expansion” of the monetary supply, the bank said. If needed, the bank will assist the Treasury regarding external debt payments.

Macri’s era registered a capital flight of $88.4 billion

The “formation of external assets of the non-financial private sector” last December was negative ($153 million) for the first time in three years, according to data from the Central Bank (BCRA) Exchange Balance. What is known as "capital flight" totalled $26.9 billion in 2019, just 1% below the 2018 historical record, and between December 2015-November 2019, was $88.4 billion, almost double the current BCRA reserves.

Central Bank cuts benchmark interest rate to 50% from 52%

Argentina's central bank (BCRA) has cut its reference interest rate floor (Leliq) to 50% from 52%. Since December 19 to date, Fernández administration has lowered the interest rate by 13 percentage points. The BCRA also enabled a new 90-day fixed-term deposit in pesos that will be adjusted by the inflation rate and to which each bank will add a surcharge of at least 1%.

Central Bank begins fintech services regulation

Argentina's central bank (BCRA) established that Payment Service Providers (PSP) or Fintech should deposit their clients' funds in demand accounts in pesos in financial institutions of the country, and those funds should be available immediately upon request. Customers of these virtual wallets can also apply their funds to investments in common money funds.