Fixed term: after the lowest inflation of the year, is the first rate cut since May ripe?

The inflation in September stood at 3.5% monthly, and for October Private measurements project it to be close to 3% or even below. In this context, there are assets in pesos that showed a compression in interest rates, as was the case with Lecaps. For its part, the monetary policy rate continues at 40% TNAa level that was not modified by the Central Bank (BCRA) since May. In this context it is worth asking whether or not a new rate cut will come.

“I see closer a change in the ‘crawling peg’, perhaps at the start of 2025As Ricardo Arriazu puts it, prioritizing the objective of disinflation, rather than lowering interest rates. The President apparently does not want to use the interest rate much,” said economist Amilcar Collante.

“I think it will be It is necessary for the BCRA to recognize this path of inflation slowing down and Lecap rates compressing forks possible that articulates the reduction of monetary policy, but It’s not going to be a strong drop, but, To avoid a transfer to dollars, you must keep the rate above projected inflation. Therefore, it could go down a few points, leaving the TEM close to 3.3/3.4,” revealed the economist Federico Glustein.

Despite this, he revealed that we would have to wait and see the impact of laundering and the outflow of funds that may imply an eventual outflow of dollars that pcould generate “a problem in the macro balance that neutralizes the effect.”

Rates are compressed strongly: a sign of convergence?

The Lecapsat this time, yield between 3.5 and 3.7% per month, depending on the term, which implies that continue to compress. The Boncapsfor their part, were issued with a coupon rate of 3.9%, and yield 53%, which places them at a similar level to bills. For its part, in the future dollar market at Matba-Rofexthe implicit rates do not exceed 40% of TNA, so analysts estimate that A devaluation jump or an abrupt exit from stocks is not expectedat least for the end of this year.

As for the CER bondswhich adjust against inflation, they yield less than 3% in the monthwhich would coincide with inflation measurements for Octoberin which some private consulting firms already They place it below 3%, after 3.5% in September.

Beyond the market signals, there are those sent by the Government. In the latest Treasury tenderat the beginning of October, the cutting of the Lecaps It was 3.9% monthly effective in January, 3.87% in April and May, and 3.9% in August. In turn, the Boncap They fell by 3.9% in October and 3.89% in December; the Boncer at 9.99% real annual to 2025 and 10.39% to 2026; and the linked dollar had a negative rate of 2.01%.

These data imply that rates were raised compared to the secondary market, but decreased compared to the previous tender.

The change in strategy of the BCRA

It was during July when The Government proposed to end passive repos and the Central Bank decided to bring Liquidity Fiscal Letters (LEFI) into the field.an instrument issued by the Treasury that It accrues interest determined by the monetary policy rate but whose payment will be the responsibility of the treasury.

Currently, the monetary policy rate It is at 40% TNA. The last time the Central Bank reduced it was in May, when it lowered it twice.

Although at this time the Fixed terms are not regulated by Banco Central (since the minimum rate they must pay has been eliminated since March), The monetary policy rate is a reference for banks. In fact, The last time the BCRA lowered it, there was an increase in the price of the blue dollar.