Argentina’s Central Bank Adjusts Reference Interest Rate to 70%, Puts Easing Measures in Place for SMEs Amid Concerns Over Long-Term Growth

The Central Bank of Argentina (BCRA) has made its third adjustment to the reference interest rate since President Javier Milei took office, lowering it from 80% to 70%. This move is seen as a positive sign for the country’s economy, which has been facing a number of challenges in recent months.

The BCRA cited a “slowdown” in inflation as the reason for the rate adjustment, noting that despite a strong statistical drag on inflation, there has been a noticeable decrease in the rate of increase. The bank also emphasized the importance of underlying inflation measurements in the coming months, especially given upcoming adjustments to regulated tariffs for public services.

In response to the evolving economic situation and liquidity conditions, the BCRA has made access to the free exchange market more flexible for micro, small, and medium-sized companies. These businesses can now pay for their imports within 30 days and receive advances of up to 20% on capital goods. These measures are intended to support businesses during a period of strong exchange rate restrictions.

The BCRA’s decision comes in the context of ongoing efforts to stabilize and support the Argentine economy in the face of various challenges. Despite these efforts, however, many experts remain concerned about the country’s long-term economic outlook and its ability to sustain growth over the coming years.