How much does a fixed term pay?
Simultaneously and in order to increase the incentive to save in pesos, the BCRA raised the minimum limits of the interest rates on the fixed terms of human personssetting the new floor at 75% per year for 30-day deposits up to 10 million pesos. This is a monthly return of around 6.25%.
For the rest of the fixed-term deposits of the private sector, the minimum guaranteed rate is established at 66.5%.
Arguments for the rate hike
In August, the general level inflation rate and the monthly core inflation rate were reduced compared to July, although they maintained a high level compared to previous months, the BCRA admitted in a statement.
Due to this, the BCRA considered it “necessary to once again increase the monetary policy rate and thus consolidate the normalization process of the structure of active and passive interest rates in the economy to place them on positive ground in real terms.”
In its Objectives and Plans for 2022, the BCRA reported that it was beginning to leave behind the period of exceptional policies generated by the pandemic and was resuming the guidelines set forth in January 2020. In this sense, “now the strategy is being adjusted in order to establish a policy interest rate path in order to tend towards positive real returns on investments in local currency and to preserve monetary and exchange stability”.
At the same time, the BCRA indicated that “the new rates will consolidate exchange and financial stability and promote the accumulation of international reserves.”
The monetary authority said that “will continue to calibrate the policy interest rate within the framework of the ongoing monetary policy normalization process, paying special attention to the past and prospective evolution of the general level of prices and the dynamics of the foreign exchange market. Taking into account the expected paths for the monetary base and the rest of the monetary aggregates, the interest rate policy carried out by the BCRA is consistent with a reduction in the stock of remunerated liabilities (Leliq, Notaliq and Passes) in terms of GDP during 2023″.
Source: Ambito
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