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.

Basic food basket jumped 5.7% in January, retail inflation 2.3%

An Argentine type family (two adults and two minors) needed in January the minimum income of AR$40,373 ($654) to not fall below the poverty line, and AR$16,478 ($ 267) to avoid indigence, said the National Institute of Statistics and Censuses (Indec). This means that the Basic Food Basket (CBA), which gathers the minimum amount of food for subsistence rose 5.7% monthly; while the Total Basic Basket (CBT), which in addition to food includes transport and some clothing, increased 3.6%.

Inflation slowed in January to 2.3%, official data

Inflation in January slowed to 2.3%, the lowest monthly rate recorded since July 2019, the National Institute for Statistics and Census (Indec) reported. The highest item was recreation and culture (5%) followed by food and beverages (4.7%). In December 2019, prices had increased in Argentina by 3.7%. Compared with data recorded in January 2019, the cost of living has increased by 52.9 percent on average.

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%.

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.

Argentina was the third country with the highest inflation in the world in 2019

With a rate of 53.8%, Argentina became the third country in the world with the highest inflation in 2019, after Venezuela and Zimbabwe, according to the latest report of the International Monetary Fund. Its performance contrasts with the one-digit increase in retail prices in the rest of South America and with the situation of the top 20 countries on the list.

Central Bank seeks to reduce rates in January

Argentina’s new central bank president, Miguel Pesce, pledged to further cut interest rates in January (currently at 55%) to boost a free-falling economy while fighting inflation through a “social pact” that would encourage companies to raise production rather than prices. He said that the BCRA will continue with the controls of the exchange market and anticipated that it will extend the 7-day term of the Leliq treasury bills.