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Updated Guidelines: New Measures

In updating the monetary policy guidelines, the Board of the BCRA adopted the following measures:

• Set the overnight reverse repos interest rate at 24%, up 5 p.p. against the current level of 19%. This measure seeks to make short-term financial instruments in pesos more appealing, discouraging any behavior that may affect the forex market within a context of seasonal tension. At the same time, the monetary policy will manage the stock of LELIQ bills in order to lessen the impact on the sterilization cost.

• Leave behind the uniform devaluation, giving way to higher volatility and keeping the multilateral real exchange rate at a competitive level. Following a managed floating exchange rate strategy, the daily depreciation pace will gradually adjust to current needs.

• Open a round at the Electronic Securities and Foreign Currency Trading Market (MAE, in Spanish), and authorize the purchase of yuan-renminbi against Argentine pesos. Futures contracts may further be executed in yuan-renminbi. However, yuan cannot be purchased for saving purposes nor can bank accounts be opened in such currency. This measure is aimed at streamlining foreign trade transactions.

The BCRA will use its reserves in yuan for the sake of these transactions. Anyway, yuan under the currency Swap Agreement signed with the People´s Bank of China are not expected to be used.

• Facilitate New Foreign Direct Investments by allowing companies to have free access to the forex market to repatriate investments as from the first year they are carried out.

• Block the taxpayer identification numbers (CUIT) of senior officers of the national public administration up to the position of undersecretary or similar, including national legislators (representatives and senators) and board members of public banks and the BCRA—so that they cannot purchase foreign currency for saving purposes.

October 1, 2020.

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