BCRA's attack on inflation: with LELIQ, it has absorbed 300 000 million dollars since October

With strict monitoring inflationary deceleration, the central bank continued "dry" the square of weightin a day during which he obtained a new rate reduction while the dollar gave 1.9 percent.

The central auction this Thursday 189 162 million dollars letters of liquidity (LELIQ) with a average yield low at 60 753% annually, with a reduction of almost half a percentage point compared to the previous 61.198%.

The maximum granted in these eight-day letters was 61,026 per cent. These debt securities are offered by BCRA exclusively to banks.

In the face of the day's deadlines for $ 145,742, the entity chaired by Guido Sandleris specified a strong aspiration of liquidity for about 43,420 million pesos.

The entity carries absorbed through LELIQ, about 301,530 million dollars since early October. This amount represents a 21.8% of the monetary base (notes and coins in circulation, checks in pesos and deposits in current account), for $ 1,384,218.3 million, according to the balance of the entity on 23 November last.

In agreement with the absorption of weights of the financial market, with high interest rates, the size of this liability is increasing in the balance sheet of the BCRA. Today it is amount of the LELIQ is close to 700 000 million dollarsvirtually half of the monetary basewhich is the total money on which the economy runs.

Remove weights from the square is fundamental to prevent this liquidity from entering the demand for dollars, deepening the devaluation, or The consumption, pushing for higher inflation, and in keeping with the promise of "zero growth" of the monetary base in nominal terms until June 2019.

For November, inflation should be around 3% and some badysts have found that it could be a little smaller, a trend that leaves room for minimum of 13 points percentages in the rates, of 73.5% on October 8th.

The BCRA Monetary Policy Committee is studying the possibility of eliminating the floor by 60% for rates until the end of the year, a commitment was made to the board of directors of the International Monetary Fund (IMF). This decision will be known on Monday, December 3, before the opening of the financial markets.

The monetary entity will take into account the result of the transaction. Market Expectations Survey (MER)if, indeed, a second consecutive month is specified lower expectations of inflation over the next two months, it will be possible to consider lower return targets that are less damaging to the performance of the economy.