Saturday, June 29, 2024
09:20
The head of the Central Bank (BCRA), Santiago Bausili, left open the possibility that the monetary policy rate could be positive in the future, after moving the passive transfers to the Treasury and thus giving greater “autonomy” to the monetary authority.
“Interest rates have much more room and it is reasonable to think that they are going to go into positive territory in real terms,” said Bausili in the press conference he gave with the Minister of Economy, Luis Caputo, at the Palacio de Hacienda.
When asked about a positive rate on the fixed terms of private banks, Bausili pointed out that these are normal market functioning mechanisms and this will be the one that sets profitability.
However, the head of the Central Bank ventured to say that “it is reasonable to believe that this will go in a positive direction, as private credit and the economy continue to grow and banks return to their traditional business of financial intermediation.”
BCRA rate
Throughout the year, the BCRA has been sharply lowering the monetary policy rate, which until now was also the rate for passive repurchase agreements paid by the monetary authority, and recently brought it to 40% nominal annual. This is equivalent to an effective monthly yield of 3.3%.
Private banks use the BCRA rate as a reference when it comes to making fixed-term deposits profitable and are paying less than 3% per month, despite the latest increases. This caused many savers to decide to stop paying in pesos and migrate to the dollar, which is why there was a mini currency run.
