Argentina's Central Bank Cuts Policy Rate by an Additional 300 Basis Points

Forex - The Central Bank of Argentina (BCRA) has reduced the benchmark interest rate by 300 basis points due to a decrease in inflation expectations. This marks the eighth interest rate cut since President Javier Milei took office.

According to the announcement from the BCRA, the benchmark interest rate has been lowered from 35.00% to 32.00%.

The decision will take effect immediately. The BCRA Monetary Policy Committee stated that the decision to cut rates was made due to the "consolidation observed in inflation expectations."

The rate cut came just a few hours after the Bank published its monthly survey of economists. The survey indicated that monthly inflation is expected to be below 3% until May, with annual inflation projected to drop to 119% by the end of the year.

Analysts suggest that the BCRA's decision to lower the interest rate was predictable, as it aims to continue supporting the government's goal of reducing inflation. They expect that the next step will be to slow down the crawling peg to make it a stronger anchor in the fight against inflation.

Inflation in Argentina was reported at 2.7% month-on-month and 193% year-on-year in October; the November inflation rate will be announced on December 11.

The BCRA does not announce the dates of its interest rate meetings in advance.