Argentina Monetary Policy July 2022

On 28 July, the Central Bank of Argentina (BCRA) decided to hike the LELIQ rate to 60.00% from 52.00% in a bit to tame inflation. Moreover, the Bank hiked a series of secondary rates.

The decision came at a time of rising inflation and a weakening peso. The current monetary policy stance of the BCRA is framed in an agreement with the IMF, which commits the country to gradually move towards positive real interest rates. The Central Bank added that it is broadening its efforts to coordinate with the Ministry of the Economy in order to progressively reduce monetary financing of the fiscal deficit.

Looking ahead, the Bank hinted at further “calibration” of the key interest rate amid the gradual normalization of its monetary policy stance.

FocusEconomics analysts see the LELIQ rate ending 2022 at 65.55% and 2023 at 63.16%.