What to expect after the December shockwaves

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What to expect after the December shockwaves

Febrero 2018

The year began as the previous one had finished, with a shaken exchange market and growing uncertainty as to whether inflation will be able to moderate at the desired pace.

The exchange rate continued to depreciate in January (4.7%) and so far this month has surpassed 20.00 ARS/USD, without the intervention of the Central Bank. As the entity decided to hold the policy rate in today's monetary policy meeting, it appreciated to ARS/USD 19.89. Policy rate is expected to remain at this level for at least Apr-17 to reduce the impact of adjustments in regulated prices. Also, inflation expectations increased in Jan-18 and reached 19.4% for this year. Wage agreements are coming and the Central Bank should have a cautious stance.