Decisions Taken by the Monetary Policy Council (COPOM)

Buenos Aires, April 29, 2019. The Monetary Policy Council (COPOM) of the BCRA has decided to make changes to the existing monetary and foreign exchange regime.

In view of the increase observed in foreign exchange volatility in the last few days, the COPOM considers that the BCRA should reinforce the contractionary bias of the monetary policy intervening the foreign exchange market in order to reduce the amount of pesos sharply and, thus, contribute to the proper operation of such market. These interventions will take place both inside and outside what was defined as the non-intervention range. In particular, the COPOM takes the following measures that change the existing scheme from today onwards:

In the first place, the BCRA could sell dollars even if the foreign exchange rate stood below ARS51.448. The sale amount and the frequency will depend on the market dynamics.

In the second place, if the foreign exchange rate stood above ARS51.448, the BCRA could increase the daily sale amount set so far from USD150 to USD250 million. Likewise, the BCRA will carry out additional interventions to counteract episodes of excessive volatility, if necessary.

In all cases, the pesos amount resulting from these sales will be deducted from the monetary base target. Thus, the measures described above allow pesos liquidity absorption when the foreign exchange rate stands below ARS51.448 and raise such absorption when the dollar rate exceeds such reference.

Finally, the COPOM has confirmed its decision of not purchasing foreign currency until June 2019 if the foreign exchange rate stood below ARS39.755.

The measures described here have been adopted with the unanimous approval of all COPOM members. The COPOM is composed of Guido Sandleris, Governor; Gustavo Cañonero, Deputy Governor; Verónica Rappoport, Alternate Deputy Governor; Enrique Szewach, member of the Board appointed by the Board of this Central Bank; and Mauro Alessandro, Economic Research Deputy General Manager.

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