After knowing the inflation of 5.1% in December, The Central Bank of the Argentine Republic (BCRA) made the decision to maintain the monetary policy rate of the last few months, which stands at 75% TNA (6.25% monthly).
With this interest rate, If a fixed term of $100,000 is agreed for 30 days, at the end of the term you will receive $106,250, that is to say, the $100,000 that he had deposited at first plus an interest of $6,250.
If at the end of that period, it is decided to form a new fixed term for 30 days with the initial money plus the $6,250 earned in interest, would get at the end of the term $112.890that is, the $106,250 deposited at the beginning of the month, to which an interest of $6,640 is added.
Prepare new $5,000 and $10,000 bills
In the event that this interest rate is maintained for the next few months and if at each expiration the person were to make a new fixed term for 30 days with the initial capital and the interest earned, in 12 months he would have $207,000. This results from the $100,000 initially deposited plus interest of $107,000.
Why the Central Bank maintains the interest rate
The Board of Directors of the BCRA resolved last week not to change the reference rate because “will contribute to the gradual deceleration of inflation in the medium term, consolidating financial and exchange stability”.
“The calibration of interest rates in positive territory in real terms guarantees the protection of savings in pesos and contributes to keep exchange rate expectations anchored, favoring the disinflation process,” the monetary authority reported in a statement
The BCRA, in its Objectives and Plans for 2023, the BCRA intends to “reduce the annual rate of inflation and build a process that restores the confidence in the local currency as a store of value, preserving monetary and exchange rate stability”.
LM / MCP
You may also like