Buenos Aires, May 4, 2018. In light of the dynamics of the foreign exchange market, in which yesterday the peso depreciated against the rest of the currencies of emerging countries, the Board of the BCRA—drawing upon its Monetary Policy Council's advice—has taken a series of measures to stabilize the market.
The monetary policy interest rate was increased by 675 basis points to 40%. Likewise, the width of the interest rate corridor was expanded. Seven-day interest rates will stand at 47% and 33% for repo and reverse repo transactions, respectively. Overnight interest rates will stand at 57% and 28% for repo and reverse repo transactions, respectively.
Effective as of May 7, 2018, the financial institutions’ positive foreign currency net global position calculated in daily stocks adjusted to the benchmark exchange rate will not be higher than 10% of the previous month's regulatory capital or own liquid funds, whichever is lower (Comunicación A6501).
In addition to the interest rate, the BCRA will go on using all its intervention tools in the foreign exchange market. These may be cash or term transactions.
The monetary authority took these decisions with the aim of avoiding disruptive behavior in the foreign exchange market and ensuring the disinflation process. Also, it is ready to take action again if necessary.
The BCRA will go on using all the tools available and conducting its monetary policy to reach its intermediate inflation target of 15% in 2018.
May 4th, 2018