The estimates and high-frequency indicators from public and private sources monitored by the BCRA suggest that, in December, inflation will be lower than 1.5% monthly, so the BCRA would fulfill its inflation target for the last quarter. From a broader 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 a monthly average of 1.5% between July and November (equal to an annualized rate of 19%). This flags a sharp slowdown against the first half of the year.
The findings of the Market Expectations Survey (Relevamiento de Expectativas de Mercado, REM), performed by economic analysts from the BCRA, were released today. Inflation expectations for 2017 were higher than those released last month. The expected annual change of the headline CPI for Greater Buenos Aires increased by 0.8 percentage points (from 20.2% in November to 21% in December), and the core CPI for Greater Buenos Aires rose by 0.4 percentage points (from 18% in November to 18.4% in December).
Based on all the available information, the BCRA has decided to keep its monetary policy rate, the center of the 7-day repo corridor, unchanged at 24.75%. It also kept unchanged the floor and ceiling of the corridor at 23.75% and 25.75%.
The BCRA will continue taking anti-inflationary measures to ensure a sustained disinflationary process towards its inflation target between 12% and 17% this year.
