By curbing the dollar, the Central Bank raised the fixed-term rate to a minimum of 30 percent

How did you get ahead today Infobae, the Central Bank of the Argentine Republic raised the fixed term rate to 30% in an attempt to contain the dollar. The current rate until today had a minimum of 26.6 percent.

In a statement this morning, the measure to raise “the minimum rate to remunerate deposits in fixed terms to the equivalent of 79% of the Leliq monetary policy rate, which entities should offer as of June 1, 2020, was made official Group A financial institutions, which represent almost the entire system. Communication “A” 7027 approved by the BCRA board of directors raised the remuneration of the fixed terms from 70% to 79% of the Leliq rate. ”

“It means for savers, regardless of volume or business name, an Annual Nominal Rate of 30.02% (TNA) and an Annual Effective Rate of 35% (TEA). The benefit of the minimum rate will not be available to companies that have accessed the financing lines at a subsidized rate of 24% ”, indicated the entity that presides Michelangelo Pesce.

As this newspaper highlighted this morning, it is a measure, perhaps still timid, to seduce investors to stay in pesos instead of going over to the dollar. But it is not only key to achieve this that inflation remains at low levels, but especially that the exchange rate behaves more stable.

Yesterday, the Central Bank tightened the restrictions to operate in the foreign exchange market even more. The objective? Smooth the demand for official dollars and at the same time reduce currency gaps. In this case, the measure is for companies, both to carry out imports and for those that must pay debts abroad. Although the restrictions for small savers were not touched, they will be able to continue buying the 200 “solidarity” dollars also in June, until the last moment the entity’s board considered including them, an alternative that was finally ruled out.

The main measures adopted by the BCRA are:

– Companies that have “liquid assets originated in the formation of external assets”, that is, that have dollars deposited outside the local financial system, must first have these resources to pay obligations abroad.

– The restriction to carry out the purchase and sale of public securities in local currency with settlement in foreign currency is extended to 90 days before and 90 days after, for companies that require access to the official exchange market.

– Companies must request authorization from the BCRA to buy dollars destined for the import payment of goods if they reduced their commercial obligations to January 1, 2020.

One of the strongest measures is to prohibit companies from importing, which should reduce demand in the official foreign exchange market. The Central Bank calculates that these operations add up to an amount of about USD 2,000 million. These are importers looking to get ahead and access the market taking advantage of the backwardness of the official exchange rate, thus covering an eventual exchange rate jump.

In addition, the BCRA also expanded the possibility for agricultural producers to make variable-rate deposits, linked to the price of the dollar.

“This option is added to the existing ones tied to the prices of cereals and oilseeds. The possibility of accessing these deposits at a variable rate is for people with agricultural activity and for an amount of up to 2 times the total value of their sales of cereals and / or oilseeds registered since November 1, 2019, “said the authority monetary.