The Brazilian bank raised the rate to 9.25% and anticipated another hike of the same magnitude in February, leading economists to estimate that the rate may reach 12% early next year. On September 1, Chile also opted for the same strategy: the Central Bank raised the benchmark interest rate to 1.5%, higher than expected, due to the potential effect on inflation of a solid economic recovery after the impact caused for the coronavirus pandemic. Peru, Mexico and Colombia also went the same way.
In this framework, the Central Bank (BCRA), with its sights set on 2022 and a change in international conditions whose rise in rates impacts on emerging economies, was also forced to accelerate the process after more than a year without modifications. The reference interest rate is in negative values of 13% taking into account inflation.
The negative real rate discourages saving in pesos. In that sense, Martín Guzmán expressed this week while defending the 2022 Budget, that savings in local currency must be encouraged. In part, so that savings do not go to the dollar, which impacts reserves, prices and the rise in inflation.
As confirmed by official sources Ambit, the Central Bank analyzes its first increase in the interest rate in more than a year, which would be around 3%. The monetary authority will apply this increase to reduce the gap in real interest rates -adjusted for inflation-. Perhaps the rate hike has a double benefit: agreeing positions with the IMF and also, in adopting a monetary policy that contains the inflation expected for 2022, be higher.
Source From: Ambito
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