Tuesday, July 23, 2024

BCRA is not considering raising interest rates despite record inflation in…

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Buenos Aires – shock Prices not reached. Despite the sharp increase in the monetary policy rate that the central bank ratified almost a month ago – it raised it 21 percentage points to 118% of the TNA – monthly effective yield on term deposits. fell under Economic inflation Which most private consulting firms would expect August. still single A senior BCRA source told Bloomberg Línea that another rate hike is not out of the question.

he A question mark Regarding whether The Central Bank will verify the validity of another price adjustment After Indec announced on Wednesday, the inflation rate rose in August Not only is it very likely, The effective monthly rate of 9.12% resulting from fixed periods will be below From increasing prices. And also because, after the specials, It could fall behind the record for the month of September.

The risk of this happening is that, in this scenario, savers will be tempted to do so converting those pesos into foreign currency, which adds pressure to Parallel dollars And widening the exchange gap.

Why won’t BCRA raise the rate?

but he BCRA You have reasons not to raise the price again. Despite the fact that according to estimates by Eco Go economist Rocío Pisang, the inflation rate in August will be at 11.5% levels and in September inflation will slow at the margin but will still be in double digits (their preliminary estimate is according to the consultancy). Inc., it will be in the region of 10.5%). The monetary authority will not adjust the price And the a reason from him seems to be in High semi-financial cost And in resolution Not to calm the economy further.

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Federico ForiasiThis is explained by the director of Anker Latin America Against the monetary case generated internally interest on offsetting obligations, The interest rate tool is much less effective To stop the nominal race and inflationary stagnation. He adds that the decline in effectiveness occurs above all in this context characterized by the low level of central bank reserves and the lack of expectations.

“On the other side, One would think that with the IMF already cashing in, Government incentives for conservation fund requirements The true positive rate is much lower. maybe later The only point at which one can make more sense of an interest rate hike than in trying to stop pressure on fiscal dollars In the previous elections, the economist added more than the goal of containing the nominal race.

I asked about it Alejandro GiacoyaEconomist at Econviews, He also asked whether the central bank might consider raising interest rates again. Despite record inflation expected in August. Although he recalled that “there is a commitment to maintaining positive real interest rates, and this implies raising them,” he also indicated that “BCRA can expect inflation to drop in September – which I don’t think will happen – which is why it will stay at this level.“.

How much does the quasi-fiscal deficit grow for each point increase in price?

Marina Dal Pogetto, Director of Eco Go, said on Wednesday, during her participation in the Latin American Economic Forum, that the main problem of the Argentine economy today can be found in the balance sheet of the BCRA. There are a lot of pesos and dollars missingsummed up the economist who added that Two-thirds of those remaining pesos are payable liabilities to the central bank, which creates the peso at a rate of $1.8 billion per month.

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According to data from Salvador Vitelli, Head of Research at Romano Group, Today, BCRA pays the equivalent of 1.1% of GDP in monthly interest on its debt. He cautioned that given the current stock of central debt – which is just under $20 billion – Each point increase would represent an increase in the quasi-fiscal deficit of approximately $16.6 billion.

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