The Central Bank of Argentina (BCRA) has announced a reduction in its reference interest rate from 80% to 70%. This marks the third adjustment since Javier Milei became president, with the rate starting at 133% when he took office in December last year. Despite ongoing economic challenges in the country, the decision was made in response to a perceived slowdown in inflation, according to the BCRA.
The BCRA pointed out that after significant price adjustments in December 2023, including a devaluation of the peso against the dollar, there has been a notable deceleration in inflation. However, underlying measurements without regulated or seasonal prices will become increasingly significant in the future. This is especially important given the upcoming adjustments to regulated tariffs for public services.
In addition to the interest rate adjustment, the BCRA also announced measures to support micro, small, and medium-sized businesses. They have made access to the free exchange market more flexible, allowing companies to pay for imports within 30 days and offering advances of up to 20% on capital goods. These changes aim to ease financial pressures on businesses in a challenging economic environment.
Overall, the BCRA’s decisions reflect a comprehensive approach to managing the country’s economic challenges and promoting stability in the financial sector. While uncertainties remain, the institution is taking steps to address inflation and support businesses, demonstrating a commitment to navigating the complex economic landscape in Argentina.
