Argentina Cuts Key Rate to 100% by Swapping Main Policy Tool
- Central bank abandons 28-day notes in favor of 1-day repos
- Move lowers key borrowing costs by 33 percentage points
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Argentina’s central bank changed its benchmark tool for monetary policy Monday, replacing four-week notes with one-day transactions in a bid to lower borrowing costs.
The monetary authority will no longer auction its 28-day Leliq notes, which until now were used to determine its policy rate. Instead, the 1-day repo notes that currently pay an interest rate of 100% will serve as the bank’s new policy benchmark.