Argentina’s central bank on Thursday announced a change to its strategy for setting the country’s interest rates, which have risen sharply since the start of the year as the institution struggles to fight rising inflation.
Borrowing costs will now be determined according to a range defined by three variables: the interest rate on short-term Treasury bonds, the 28-day Leliq reference rate and the overnight borrowing rate, according to an announcement.
The central bank’s overnight rate will act as the lower end of the range and the Treasury bill rate will be the ceiling.
Under previous central bank policy, the 28-day Leliq was the sole determinant of the benchmark rate.
The decision aims to “achieve a positive interest rate scheme in real terms for the economy,” the central bank said.
Argentina has committed to adopting positive real interest rates as part of its credit agreement with the International Monetary Fund (IMF).
A central bank spokesman did not immediately respond to questions from Reuters.
Source: CNN Brasil
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