In the last week, the inflation data for IPC GBA, published by INDEC, IPC CABA, published by the City of Buenos Aires, and IPC Córdoba, published by the Province of Córdoba, were released. The results of the last months were the following:
| August | September | October | Average | ||
|---|---|---|---|---|---|
| GBA | General Level | 0,2 | 1,1 | 2,4 | 1,2 |
| Core | 1.7 | 1.5 | 1.8 | 1.7 | |
| CABA | General Level | -0,8 | 1,3 | 2,9 | 1,1 |
| Core | 1.6 | 1.5 | 2.0 | 1.7 | |
| CORODBA | General Level | 0,3 | 1,8 | 2,2 | 1,4 |
| Core | 1.6 | 2.0 | 1.7 | 1.8 |
The relatively low general level records for August and high records for October reflect the reversal of the original gas tariff increase in that month and the subsequent realization of an increase in October. The Central Bank of the Argentine Republic (BCRA) had announced in the presentation of the Monetary Policy Report on October 18 that, in order to evaluate its inflationary target for the last quarter—established before the judicial decision that led to the tariff changes—it would compute for October an average of August-October inflation, which includes both the decrease and the increase in gas prices. This is a correction with biases that counterbalance each other: the tariff increase was less than the reduction; but by including August and September, months prior to those originally planned are computed, and therefore with a trend towards higher inflation given the disinflation path. With this calculation, a record of 1.2% monthly is obtained, which indicates that the BCRA is well positioned to meet its inflation target of 1.5% monthly or lower in the last quarter.
In October, the evolution of core inflation was uneven among the jurisdictions, although in the case of the GBA it was influenced by components associated with the increase in tariffs.
During the last weeks, the Central Bank maintained a conservative position in order to prevent the October inflation from being transmitted to expectations. The estimates and high-frequency indicators from state and private sources monitored by the Central Bank suggest, for the month of November, an evolution in line with the disinflation path foreseen by the monetary authority.
In the last week, most of the world’s currencies depreciated against the dollar, as a ramification of the election in the United States. The depreciation of the peso against the dollar in this context is not inflationary, but only counteracts the deflationary pressures associated with said depreciations. This type of dynamics is precisely the way in which flexible exchange rate regimes work to automatically cushion external shocks.
Considering both domestic and external factors, the BCRA decided to reduce the rate of the LEBAC to 35 days and the center of its pass corridor by 50 basis points, to 25.75%.
The Central Bank will be attentive to the development of events in the markets in the coming weeks. This institution will continue to maintain a clear anti-inflationary bias to ensure that the disinflation process continues towards its goal for this year of a monthly inflation of 1.5% or lower in the last months of the year and that inflation expectations for 2017 decrease
