Seventh consecutive loss of the LELIQ rate, down 58%


O central bank On Monday he held his Liquidity Letters Auction (LELIQ) at 7 days. The amount granted was US $ 172,096 million, with one monetary expansion of around US $ 23 billion, even within the objective of the monetary aggregates of the entity, in comparison with the salaries of 193,244 million pesos.

The BCRA validated a average cutting rate of 57.801%, common cut about 30 basis points compared to the previous 58.107% a year, the lowest since August 29 last year, when it stood at 45% a year.

The maximum rate granted in the auction was 58.25%, while the minimum rate granted was 57.25%.

Market analysts see that it is possible to reduce rates by another 250-300 basis points in January and another 400 to 600 basis points in February.

"The average annualized movement of three months of Consumer Price Index of Argentina should go down to the 37.5-40 percent in the first quarter (from 2019), level compatible with the LELIQ 50% or below", he described an analysis of Balanz Capital.

"Tax collection grows at a slower pace than inflation, which stands out importance of lowering interest rates for allow recovery of local activity suffered, "the consultant reported. VatNet.

According to a Consulting Ledesma, based on BCRA data, the monetary effect of the wheel was a absorption of US $ 23,035 million, accumulate US $ 282,558 million aspirated since the LELIQ rate was established as a benchmark for monetary policy on October 1st.

A study of IARAF (Argentine Institute of Fiscal Analysis) pointed out that "the economy lags behind for many years of issue of pesos to finance the Treasury. And these delays are not static because, for example, stock of LEBAC transformed into LELIQ follow growing according to the interest rate diary that is emerging. "

"O The key is to eradicate the fiscal deficit. This year, the year 2019 is taking an important step with the deficit before interest – called primaries -. The challenge of making sustainable reduction on this side remains, but we must also create conditions for to reduce the deficit explained by the of debt, "added the IARAF.


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