Economics
Argentina Rates Drop as Traders Find Something to Believe In
- Decline in benchmark Leliq zooms past economist expectations
- Argentine peso’s recovery made move to lower rates possible
Pedestrians walk in the financial district of Buenos Aires on May 11, 2018.
Photographer: Eitan Abramovich/AFP via Bloomberg
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Argentina’s highest-in-the-world interest rates are finally coming down as investors gain confidence that the central bank’s monetary plan is credible and yielding results.
The key monetary rate has tumbled more than 11 percentage points in just the past two weeks to a five-month low of 43.971 percent as the central bank stamps out volatility in the peso and a more favorable global backdrop adds to optimism. The so-called Leliq is set by daily auctions rather than by the central bank, a change made in October after Argentina unveiled a record $56 billion credit agreement with the International Monetary Fund.