the cost of refinancing begins to drop

the cost of refinancing begins to drop

The measure is in line with the Central Bank’s decision to go reducing the reference ratewhich since last week was set at 40% nominal annual rate.

They also began operating atLoan rates fell: they were reduced between 18% and 58% from December to the end of April, according to official data.

Now it’s the turn of the credit card balance refinancing costwhich according to sector sources began to drop around 10%.

There are regulatory limits for the cost of refinancing cards: The annual nominal 122% limit that the Central Bank establishes for unpaid balances of up to $200,000 is still in force.

For debts greater than that amount, The limit on the cost of refinancing is linked to the personal lines rate of each institution, which is equivalent to the previous month’s personal loan rate of each bank multiplied by 1.25.

In this context, the fact to take into account is that paying the minimum of the credit card summary is inadvisable, as it causes the debt to become larger.


The Central Bank lowered the rate for the fifth consecutive time


The Government’s objective and what is coming for rates

“It’s something that The BCRA has been applying since December. The inflation data came out and the rate is lowering again compared to what they expect to be a new month of inflationary slowdown in May. It is very likely that what they are looking for is for the rate to be equal to that of the crawling peg at 2% per month along with inflation and that would be logical in a healthy economy, but really, today the Central can manage it like this thanks to the stocks, if not, it would be impossible,” he describes Ambit the economist Christian Buteler.

The analyst points out that those who have surplus pesos today are the companies because the rest of society has already been dollarized in recent years and has no rest because its purchasing power has been greatly liquefied since December. And he believes that, “if the Government does not achieve its objective quickly, even with the stocks, it will be difficult for it to sustain this path.”

Without a doubt, on the other hand, The current economic team uses the rate as an inflationary anchor through the search to control the emission and the quasi-fiscal deficit that represent the liabilities of the BCRA. For the economist Federico Glustein, this “encourages the perspective among market actors that the stocks will remain in force for a while longer.”

It indicates that there is a very noticeable game dynamic between stocks and rate. “They can continue lowering it while the restrictions on access to the dollar are in force because, as long as the crawling peg continues at 2% per month, the demand for foreign currency is channeled towards the highest exchange rates,” Glustein details. And he anticipates that, if this forward dynamic occurs can lead to a rate that could reach 25% or 30% annually.

Source: Ambito

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