At the first board meeting of the year, the Central Bank decided to update the Leliq rate and fixed terms. In this way, the reference rate of the economy goes from 38% in which it was fixed since the last quarter of 2020 to 40% per year. This is one of the IMF’s requests and one of the objectives set by the Central Bank for 2022: to update the reference rates so that they can have a positive return against the rise in inflation. With a rate of 38% for almost 14 months, investments in pesos gave negative returns in the last year against inflation that exceeded 50% in 2021.
The body chaired by Miguel Pesce redesigned its monetary policy on Thursday. As he explained in a statement, he did so “with the aim of continuing to accompany the path of recovery and strengthening the conditions of monetary, exchange rate and financial stability. These decisions seek a reordering of the interest rate scheme and a simplification of the organization of systemic liquidity.”
Not only was the economy’s benchmark rate raised by two basis points to 40% per year, but it was also decided to expand the maximum limit on holdings of these Leliq to an amount proportional to the stock of term deposits of the private sector of each financial institution. In addition, the monetary authority created a new version of the Leliq, with a term of 180 days and a yield of 44% per year.
In this way, the reference rate of the economy will remain the 28-day Leliq, whose auctions will be held twice a week. Meanwhile, the six-month Leliq will be auctioned once a week.” These modifications will help to initiate a process of migration of sterilization towards longer maturity periods, as well as extend the BCRA’s reference rate curve.” detailed the agency.
Another of the points in which the Central decided to advance is in the progressive elimination of the passive passes to seven days, although the passes to 1 day of term will continue in force: “The rate of the LELIQ to 28 days will continue to be the reference indicator with respect to the orientation of the monetary policy, which will be complemented by the participation of the BCRA in the secondary market of public securities in order to align the temporary structure of rates and guarantee the liquidity of these instruments,” the Central explained in its statement.
In that sense, to try to recover the attractiveness of savings in pesos, the agency decided to raise the effective floors of fixed terms, both for retail savers and companies. “For human persons, the new floor is set at 39% per year for 30-day taxes, while for the rest of the depositors in the financial system the minimum guaranteed rate is set at 37% per year,” the BCRA detailed. Despite the adjustment, rates still lose against a projected inflation for this year of 52%, according to the Survey of Expectations prepared by the Central Bank itself.
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