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Argentina Cuts Short-Term Rate as Official Dollar Rebounds and Risk Gauge Nears 600

The move signals tactical easing to support a coming Treasury placement.

Overview

  • The central bank lowered the rate on simultáneas from 22% to 20% nominal annual, easing very short-term monetary conditions.
  • The wholesale dollar rose for a third session to about $1,425, with Banco Nación’s retail rate at $1,450, while futures prices advanced across tenors.
  • Parallel exchange rates moved unevenly, with the blue slipping at times below the official and MEP and CCL showing modest gains.
  • Sovereign bonds swung from early gains to later declines as the country risk index oscillated around 600 points, dipping below intraday before closing slightly above.
  • The Treasury resumed small dollar purchases, including a reported US$97 million on Friday, as officials stress reserve build-up will come from remonetization rather than an artificial FX move; wholesale inflation slowed to 1.1% in October, according to INDEC.