After the inflation data, the market evaluates what the BCRA will do with the rate

After the inflation data, the market evaluates what the BCRA will do with the rate
November 14, 2023 – 00:00

The moderation of the price increase was confirmed and the interest rate remained in positive territory. The fixed term pays 11% monthly. Analysts are leaning towards the possibility that there will be no changes this week.

Yesterday, the National Institute of Statistics and Censuses (INDEC) reported that the Consumer Price Index (CPI) for October stood at 8.3%. Although it continues at very high levels, this marked a considerable slowdown in inflation compared to the previous two months, when it had been above 12% as a consequence of the devaluation after the PASO. In this framework, already five days into the runoff, the market is analyzing what the Central Bank will do this week with interest rates: despite the moderation of the monthly CPI, the expectation is that it will keep them unchanged.

The BCRA has just sharply increased the annual nominal rate (TNA) of the fixed term and Liquidity Letters (Leliq) to 133% last month from the previous 118% TNA, after the INDEC published September inflation, which marked 12.7% and slightly exceeded the 12.4% in August. The monetary regulator is now expected to keep it unchanged despite the CPI slowdown.

Economist Pablo Ferrari tells Ámbito that the moderation in the inflation figure means that there are no reasons to raise the reference rate, at least at this time.

Likewise, from Analytica, economist Claudio Caprarulo pointed out that “fixed-term deposits fell 12.5% ​​in October in real terms.” This responded to so much electoral uncertainty, which accentuated the dollarization of investments and the preference for liquidity. Thus, in the face of this dynamic, everything would indicate that it is most likely to maintain the rate at current levels.

“Surely, the BCRA will continue with the trend of keeping it similar or slightly above the inflation expectation with the objective of consolidating deposits in pesos in the system and avoiding adding pressure on the illegal dollar,” says economist Ricardo Aronskind. .

Along similar lines, economist Christian Buteler maintains that, taking into account the slowdown in inflation, it is expected that the BCRA will keep the rate unchanged this month.

All in all, taking into account that some analysts propose a path of possible lowering of rates in the event of a possible moderation of inflation, Camilo Tiscornia, director of CyT Economic Advisors, believes that a decision in this sense could be a move with political content, but , taking into account the forward perspective, it will most likely leave it at the same level as the current one.

With a TNA of 133%, it guarantees an annual effective yield (TEA) of 253.3% for retail fixed terms and a monthly effective rate (TEM) of 11%, the first above the expected annual inflation and the second almost 3 points above the October CPI, which would guarantee a real effective return on deposits in both cases.

Source: Ambito

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