The BCRA Raised the Yield on Time Deposits

The Board of the BCRA has decided today to raise the interest rate on time deposits by 200 basis points. The new floor for individuals' 30-day time deposits up to ARS10 million is 48% annual percentage rate (APR), which represents a 60.1% effective annual rate (EAR).

For all other private sector time deposits, the minimum rate is 46%, which equals a 57.1% EAR.

The Board of the BCRA has also decided to raise the yield on 28-day liquidity bills (LELIQs) by 200 basis points, from 47% to 49%, which represents a 61.8% EAR.

Lending interest rates stand at favorable levels, especially for investment and production, and for micro-, small-, and medium-sized enterprises (MSMEs). The APR on credit lines for productive investment and working capital remains at 37% and 47.5%, respectively.

In addition, the BCRA will continue regulating certain key rates for household consumption.

In accordance with the high-frequency indicators monitored by the BCRA, a slowdown in the general level of prices—against the rise recorded in March—was observed in April. Inflation is expected to continue falling gradually in the coming months.

The current international financial conditions and the recent performance of commodity markets suggest that the prices of commodities may have reached certain stability.

The BCRA will continue monitoring the development of prices and will consider reversing the monetary policy bias as soon as the downward trend of the inflation rate is consolidated.

May 12, 2022