The findings of the Market Expectations Survey (REM) were released in the past two weeks. As for January’s survey, inflation expectations for 2017 remained at 20.8% for headline CPI in Greater Buenos Aires, while expectations for its core component rose from 18.4% to 18.5%. For 2018, the figures slightly increased. Expectations remained below the inflation targets set by the monetary authority for 2017 (12-17%) and 2018 (8-12%).
In turn, the estimates and high-frequency indicators from public and private sources monitored by the BCRA show that February’s core and headline inflation will be above the figures recorded in the past few months, greatly driven, though not exclusively, by regulated prices.
Those indicators suggest that, in March, the disinflation process will be following the path expected by the BCRA. These developments show a level of volatility in monthly inflation which is to be expected in disinflation processes—in this case heightened by changes in regulated prices—and call for a cautious approach.
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%.
The BCRA will continue taking anti-inflationary measures to ensure a sustained disinflationary process towards its inflation target between 12% and 17% in 2017.
