Monday , March 8 2021

The central bank limits the influx of capital from abroad to discourage the "financial bicycle"



Sandleris's decision

Fixed fall in reserve requirements for assets that entities must keep immobilized. She tries to discourage short-term speculative movements

The Central Bank today has set a reduction in the reserve requirement for funds that financial entities have to hold to immobilized companies, in order to discourage the entry of speculative short-term capital.

According to the statement "A" 6595, which the monetary authority sent Friday to the bank, the reserves begin with 23% for income up to 29 days; 17% for those who stay up to 59 days; 11% for the capital that remains in the country for at least three months and zero for those who exceed one year.

Banking reserve is part of the deposits that banks must keep immobilized in order to publicly handle their cash payments.

With this measure, the organization led by Guido Sandleris is trying to discourage transfers by some foreign banks to their parent companies bet on high interest rates by purchasing liquidity (Leliq) or capitalizable letters (Lecap), posted on Friday at the site lanacion.com.

In this way, try to discourage a "financial bicycle" that basically runs the three sides of the bank.

The dollar price fell 13% since the beginning of the new monetary plan at the beginning of August, and is now near the floor of the flotation band, set at 35.29 pesos.

From China Sandleris said that the current monetary policy is "more powerful and simpler" than the previous one to reduce inflation.

"We should have done something to ensure that inflation, in Argentina, begins to fall," said a Beijing official, before heading back to Argentina.

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