The province of San Luis released its CPI last week. Headline CPI rose 1.3% in November.
As this is the last release, the BCRA deems it appropriate to assess the recent evolution of inflation in perspective. The headline CPI for Greater Buenos Aires calculated by the National Institute of Statistics and Censuses (Instituto Nacional de Estadísticas y Censos, INDEC), which is the index that the monetary authority uses to assess the fulfilment of its targets, increased slightly below 1.5% monthly average between July and November (19% APR). This flags a sharp slowdown against the first half of the year. Moreover, the inflation rates for CABA and for the province of San Luis, for which there is a historical series, indicate that inflation in the second half of 2016 was the lowest for this period since the publication of the index for the City of Buenos Aires in 2012, and the lowest in the past decade for the province of San Luis, except for 2008.
Also, the estimates and high-frequency indicators from public and private sources monitored by the BCRA suggest that, in December, inflation will be lower than that of the half-year average so the BCRA would achieve an average monthly inflation target of 1.5% or lower for the last quarter.
Considering that monetary policy operates with lags, the BCRA’s monetary policy focuses on achieving its inflation target for 2017.
In view of the available data, the BCRA decided to keep the 35-day LEBAC rate and the center of the repo corridor at 24.75%.
As announced on September 26 during the presentation of the inflation targeting regime, starting next week, the monetary policy rate will be the 7-day repo rate (replacing the rate corridor previously set by the monetary authority around the 35-day LEBAC rate).
The BCRA will continue taking anti-inflationary measures to ensure a sustained disinflationary process towards its inflation target between 12% and 17% in 2017.
