The INDEC announced that inflation in March 2022 was 6.7%, the highest in 20 years, and that caused an increase in the interest rate for fixed terms.
After it was announced that inflation in March 2022 was 6.7%, which means the highest in 20 years, the Central Bank of the Argentine Republic (BCRA) decided to raise the interest rate by 250 basis points. interest that will go from 44.5% to 47%.
How was the interest rate for fixed terms following inflation
This increase means an Annual Effective Rate of 58.7%. Furthermore, with this increase, fixed terms for individuals of up to $10 million will begin to pay a rate of 46% (57.1% annual effective rate).
On the other hand, for the other time deposits of the private sector the guaranteed minimum rate is established at 44%, which is equivalent to an Annual Effective Rate of 54.1%. From the BRCA they reported that “active interest rates remain at levels compatible with the boost of investment and production, and the development of the MiPyME sector“.
In turn, from the monetary authority they pointed out: “The Central Bank, in coordination with the National Government, will use all its tools to help moderate the second-round effects of the commodity shock on inflation.”
Finally, regarding the increase in inflation, they considered that “The acceleration of inflation in March compared to previous months is largely the result of an international shock that especially affected food and energy prices, caused by the war in Ukraine, to which was added the concentration of increases in prices of regulated goods and services (petrol, electricity and gas, education and prepaid, among others) and seasonal increases (especially clothing)”.
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