“We highlight that real rates will remain in negative territory despite the (recent) rise, given inflation expectations both for the year and for March,” the SBS Group said.
The prices of sovereign bonds issued in pesos reflect the expectation of inflation, with a firm country risk above 1,700 basis points despite the latest monetary decision.
A source with access to the central bank’s decisions recently told Reuters that the body will raise its ‘Leliq’ rate again in April if March inflation is close to 5%. In February, the general rise in prices was 4.7%.
The IMF”understands the rise in rates as an anti-inflationary policy, while the BCRA understands positive returns as a reward for staying in pesos and a discouragement of dollarization”a banking source told Reuters.
The agreement approved last week by the IMF board contemplates a reduction in the fiscal deficit, positive real rates, an increase in BCRA reserves and a moderate growth of the economy.
Source: Ambito
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