The authorities of the Central Bank (BCRA) will define in the next few hours the new upward adjustment that they will apply to the reference interest rates of the economyfollowing a new, expected and worrisome figure for inflation in January (3.9% at a general level) was made official today, and following signs were known every day that indicate that it would maintain a similar rate of increase in the cost of living this month.
The decision in this regard, as confirmed by LA NACION, has already been made and it only remains to establish the magnitude of the second upward readjustment of that variable that the entity will have in 40 days and would be defined this Thursday, in the traditional weekly board meeting.
Most analysts estimate that it will set an increase of two points both in the reference rate (the one that pays for the Leliq, which would go from 40% to 42%), and in the minimum regulated for time deposits in pesos fixed retail (it would remain at 41% per year).
In this way, it would seek to close the gap of 6 to 12 points (depending on the nominal or effective annual rate) that had opened with general inflation during 2021, since for this year the market -according to the REM of the BCRA itself- expects an average increase in the cost of living that goes from 55% to 57.9% per year.
Of course, this would trigger another rearrangement of active rates (the one paid for loans) that have already risen last month from 43% to 49% per year in the case of financing balances for consumption with credit cards.
“To stay on the table with the cost of living, the monetary policy rate should be at least 48% TNA, regarding 800 basic points more than today”, graphs the economist Nery Persichini, from the GMA consultancy.
The new rise will be defined following the commitment assumed before the IMF. In fact, it was the official decision to reach an understanding that put an end to the passivity that the monetary entity had shown in this regard since the beginning of the Fernández administration, repeating an old and hackneyed strategy from previous Kirchner administrations, and even embodied in its policy objectives for 2022, a document released at the end of 2021, in which it included “setting the path of the policy interest rate so as to go from negative to positive real returns.”
It is worth remembering that the current conduct of the BCRA had been characterized by lowering rates: he did it seven times during the Pesce administration, to reduce them from 63% to 40% annual nominal rate in an attempt to make a difference with the rate policy that characterized the Macri administration.
Of course, later he didn’t even readjust them when the CPI came to border on 5% per month, in March of last year, not even despite proclaiming in his documents that he sought to “encourage” savings in pesos.
The definition of the magnitude of the rise will not only take into account the CPI for January, but also the quasi-fiscal cost that will add pressure to a The BCRA, which is already burdened with a very heavy interest-bearing debt, amounting to $4.7 trillion and forcing it to pay some $1.34 trillion in interest last year, and the impact that it might have on the definition of the rate of adjustment that will apply to the exchange rate from now on.
“For every 100 basic points that the rate rises, the interest bill grows by more than $40,000 million per year,” explains the consultant and economist Fernando Marull. “But it is a cost that you may well offset by adjusting the crawilng peg, since every $1 that the official dollar rises, the income rises by regarding $100,000 million of Non-Transferable bills that it has recorded in its assets. It is poor quality debt, but for these accounting purposes it is very useful”, he says.
The balance game that the BCRA is obliged to follow, taking into account its very weak reserves and equity position, It must also consider the impact that the accelerated change in the composition of its remunerated liabilities will have from now on.
“Passive passes, which had expanded throughout 2021, reaching almost 60% of the debt, and lowering the cost of sterilization, now represent around 20% of it and, although the change in the duration of the debt total had a beneficial effect in the short term (interest paid fell from $145,000 million to $116,000 million from December to January), it will not have it in the long term”, warned the consulting firm Delphos Investment in a report.
“If the BCRA does its homework by absorbing excess liquidity, we see a quasi-fiscal deficit of around $2.4 trillion (3.4% of GDP), rising from 3% of GDP in 2021, with non-monetary liabilities of $8 trillion to end of this year. On the other hand, in a scenario where higher inflation requires a rise in the monetary policy rate to 45% TNA (55% TEA), the quasi-fiscal red would increase to $2.7 trillion (3.7% of GDP), with a stock of Leliq and passive passes of $ 8.2 billion in December 2022 “, they record.
