Tuesday , October 26 2021

The central bank exceeded its monetary base targets



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Central Bank of the Argentine Republic, in force in December monetary base increase (BM) using "seasonal adjustments" 6.3%for special reasons such as premium and compensatory premiums.

Thus, in the first December review report, the company confirmed that despite "The demand for the transaction currency associated with these payments does not create inflationary pressures." In addition, they stressed that for banks to have the necessary liquidity to meet seasonal demand for pesos, the value of the entire stock Leliqs.

In this context, the Agency stressed that "the new monetary framework was operating over the first three months of the monetary base".
Monthly averages for October and November were $ 1,253 and $ 1,256 billion, respectively, for $ 19 billion and $ 15 billion, down $ 1,271 billion.

Two months ago, the scheme planned to increase the BM target to $ 1.351 billion, complementing the seasonal increase in demand for transaction money. Since WB's monthly average for this month was $ 1,337 billion, over-compliance in December was $ 14 billion, slightly below the $ 16 billion target. Monetary Policy Committee of the Central Bank of the Argentine Republic (COPOM).

This result was influenced by a significant increase in circulating demand, which exceeded the seasonal deviation and began to change every registered episode of nominal instability in 2018.

To achieve your goal, BCRA auctions short-term letters every day, Leliqs. In contrast to what happened in the previous two months, BCRA did not renew everything in December LELIQs that they beat every day but paid some of them pesos. In this way, it provided the necessary liquidity to meet the increased demand for pesos. The interest rate ended in December – 59.3%, which means 1.5 percentage points. for the end of November and 14.2 percentage points. reaching 73.5% on October 8th.

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