The Board of the BCRA has decided today to raise the annual percentage rate (APR) on 28-day liquidity bills (LELIQs) by 200 basis points, from 42.5% to 44.5%.
The Board has raised the minimum limits of interest rates on time deposits—in line with the rise in the monetary policy interest rate—in order to encourage full transmission to returns on time deposits in pesos.
The new floor for individuals' 30-day time deposits up to ARS10 million is 43.5% APR, which represents a 53.3% effective annual rate (EAR).
For all other private sector deposits, the minimum annual rate is 41.5%, which equals a 50.4% EAR.
Lending interest rates stand at favorable levels, especially for investment and production, and for micro-, small-, and medium-sized enterprises (MSMEs). In addition, the BCRA will continue regulating certain key rates for household consumption.
In the Objectives and Plans for 2022, the BCRA informed that it would resume the guidelines announced in January 2020, leaving behind the period of exceptional policies adopted due to the pandemic. In this sense, interest rates increased in January and February, and a policy interest rate path has been set to obtain positive real returns on investments in domestic currency, and to preserve monetary and foreign exchange stability.
It is worth mentioning that the world economy is facing a supply shock, which implies an extraordinary rise in the prices of commodities and other key products of the supply chain. Wheat, corn, soybean, oil, gas, and fertilizers are some examples of the rise in the prices of commodities and supplies that directly or indirectly affect prices in Argentina. The National Government is developing measures to mitigate the impact of this international shock on local prices.
March 22, 2022