Fixed term: the Central Bank has already made a decision on the rate after the inflation data

inflationary slowdown

“The slowdown in the CPI was disseminated within its categories and divisions. Thus, core inflation stood at 6.5%, the lowest record since January, reducing 1.3 percentage points in the month”, highlighted the regulator in the statement it released. And he stressed that, in the Seasonal category and in the Food and Non-Alcoholic Beverages (AyB) division, the slowdown in vegetables and fruits mainly affected , reflecting that “the adverse effects of the drought, which in the previous months put upward pressure, were dissipating”.

In this way, the Central confirmed what Miguel Pesce, president of the BCRA, anticipated to Ambit recently, when he highlighted that he expected the June inflation data to come with a positive surprise.

As pointed out by the economist Pablo Ferrari, from the University of Avellaneda, “the June CPI it was much lower than that of May, which was 7.8%, and, in turn, it is already known that that of May was lower than that of April (which marked 8.4%)”. Thus, he points out that, thinking strictly about the Fixed deadlines traditions, which currently have a effective monthly return of 8%we would be another month in the presence of a positive real interest rate.

This is one of the objectives sought by economic policy at this stage, on the one hand, because it is one of the requirements set by the International Monetary Fund (IMF) in the program outlined for Argentina, but, on the other, because it is “the” resource that the Government has to combat the trend towards dollarization, typical of electoral contexts.

That is why the BCRA recalled in its announcement that its interest rate policy seeks to “generate positive real returns on investments in local currencyin order to preserve monetary and exchange rate stability”. And, he anticipated, in this sense, that he will continue “monitoring the evolution of the general level of prices, the dynamics of the exchange market and monetary aggregates for the purposes of calibrating its interest rate policy and liquidity management”.

Fixed term: can you lower the rate?

However, a data inflation at 6% leaves room for the Central to consider lower the rate forward without the need for performance to go into negative territory. Thus, the door is opened for the beginning of a downward path in fixed-term yields. But analysts generally agree that it is unlikely to head in that direction, at least for now.

“I think that, due to the instability that exists, it is possible that they will not move the rate forward, despite the fact that, now, it may be long with respect to the values ​​of the inflation“, sanctions the EcoGo economist, Sebastián Menescaldi, in dialogue with Ambit. “It would seem to me a very extreme decision to lower it because inflation slows down a bit”, points out, for his part, the director of CyT Asesores Económicos Camilo Tiscornia.

And it is that, in his opinion, they should raise it more if they want to combat inflation in a really forceful way. However, he rules out progress in either direction. “What I hope is to leave her alone in the short term”, he assures.

The same is maintained by Alejandro Giacoia, an economist at Econviews, when pointing out that he hopes that “the Central Bank will leave the interest rate unchanged, at least until the next CPI data, given that, currently, the effective monthly return is 8% and that, with inflation at 6%, implies that it remains positive” at 2 percentage points.

Positive rate: a necessary cost

And, although Giacoia acknowledges that the positive real rate has a cost in terms of remunerated liabilities, points out that it is something that the Central you will have to pay if you want to keep the exchange calm and fight the inflation. The analyst assesses that this is something necessary at this time and believes that “there is no place for lower the rate Now why can you miss them? parallel dollars”.

In the same sense, Menescaldi maintains that, “due to the current economic instability, it is feasible that they will not move it for a while, despite the fact that it will be long with respect to inflation values.” Along these lines, he regrets that the situation is fragile and anticipates that issues may arise in the future that trigger the gap and inflation. Since the big problem is that the shortage of reserves International international currencies and excess pesos cause instability and, according to Menescaldi, this requires more fundamental solutions than a rate policy, such as “restricting imports or depreciating the currency.”

In this context, as Ferrari indicates, “the slowdown in inflation It is a recent phenomenon, the prolongation of which cannot be ensured”, so it still seems too early to move forward with a reduction in rates. That path could begin later and in insignificant magnitudes. But, for the moment, as expected, the BCRA once again maintained the yield on the fixed term at 97% per year (8% per month).