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The BCRA Sets the Floor of the Interest Rate on LELIQs at 55%

December 26, 2019. The Board of the BCRA reduced today the floor of the interest rate on liquidity bills (LELIQs) by 3 points, from 58% to 55%.

The decision was taken in line with the rationale for the decision adopted last week, when the rate was lowered from 63% to 58%.

The BCRA Board considers that the benchmark interest rate is inappropriate and potentially inconsistent with the projected nominal evolution of key economic variables for a number of reasons: the current macroeconomic situation during this period of transition; the changes that the bill brought before the National Congress will entail; a call for a social pact; and the search for a sustainable sovereign debt scheme.

Along the same vein, the BCRA ratifies that a sustainable management of national debt in pesos will surely result in a new interest rate curve in domestic currency.

Finally, it is worth noting that LELIQs are affected by the current high inflation rate precisely because they are very short-term (seven days) financial instruments.

 

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