Argentina changes its monetary policy rate, lower than the previous one

The new government of Javier Milei It has been proposed to reduce the Central Bank’s reimbursed liabilities – Leliq and Passive Passes – as the interest accrued by these instruments is an expansionary factor of the monetary base and therefore inflationary.

Until a month ago, current President Milei’s concern was the ‘Leliq bomb’ and how to disarm it without causing hyperinflation.

But Leliq’s mass has been reduced in recent weeks to 3,500 billion pesos ($4,255 million), at the expense of passive passes, which amount to about 21,700 billion pesos ($26,383 million), according to data from private consultants.

Industry analysts believe that with these decisions, the new Argentine authorities are trying to encourage commercial banks to allocate peso liquidity to longer-term government bonds.

Source: El heraldo

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