*Argentina’s central bank (BCRA) has announced that it is changing its monetary policy interest rate to the one-day reverse repo rate, which has been set at a 100% nominal annual rate. This brings the interest rate down from 133%, which had been determined in accordance with the 28-day liquidity bills (Leliqs). The BCRA will no longer use the Leliq, a short-term peso-denominated debt instrument which President Javier Milei has stated his government will phase out as a priority, to determine its benchmark interest rate. “By centralising its operations in a single instrument, and by making its policy rate the only reference interest rate, the aim is to make the monetary policy signal clearer and strengthen its transmission to the rest of the economy’s interest rates,” reads a statement from the BCRA, which is now headed up by Santiago Bausili.
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LatinNews Daily - 19 December 2023
In brief: Argentina cuts interest rate by changing monetary policy tool
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