The move was the conclusion of the government’s migration of interest-bearing debt from the BCRA to the treasury. “On each modification of the annual nominal rate of monetary policy, the interest will be capitalized and considered as new capital,” says the rule. Government officials are confident the new monetary scheme will not cause significant changes in the financial entities’ management of liquidity. Despite being issued by the Treasury, Central Bank regulation indicates that the LEFI will not count towards the entities’ cap on public sector financing. Interest rates and uncertaintyOn Monday afternoon, the BCRA opted to maintain the benchmark interest rate at a 40% nominal annual rate or a 49% effective annual interest rate.

Source: Bueno Aires Herald July 23, 2024 05:23 UTC