Why is Argentina's interest rate so high?
Raising rates closer to annual inflation levels is part of the government's effort to encourage savers to stick with pesos. It's also a key pillar of Argentina's $44 billion agreement with the International Monetary Fund, which calls for so-called positive rates.
| Related | Last | Unit |
|---|---|---|
| Interest Rate | 69.50 | percent |
| Interbank Rate | 43.30 | percent |
| Money Supply M0 | 4316999.00 | ARS Million |
| Money Supply M1 | 5975505.80 | ARS Million |
Interest rate levels are a factor of the supply and demand of credit: an increase in the demand for money or credit will raise interest rates, while a decrease in the demand for credit will decrease them.
Argentina possesses definite comparative advantages in agriculture, as the country is endowed with a vast amount of highly fertile land. Between 1860 and 1930, exploitation of the rich land of the pampas strongly pushed economic growth.
| Ranking | Country | Inflation Rate |
|---|---|---|
| 1 | Argentina | 50.9% |
| 2 | Venezuela | 686% |
| 3 | Zimbabwe | 60.74% |
| 4 | Uzbekistan | 10% |
As of January 2022, the country with the highest deposit interest rate worldwide was Venezuela, where the interest rate was as high as 36 percent. Second in the list came another South American country, Argentina, where the interest rate reached 33.9 percent.
| Year | Argentina | Ø EU |
|---|---|---|
| 2019 | 53.55 % | 1.63 % |
| 2018 | 34.28 % | 1.74 % |
| 2013 | 10.62 % | 1.22 % |
| 2012 | 10.03 % | 2.66 % |
The main fiscal arguments refer to the effects of fiscal dominance and the risk of debt default. Favero and Giavazzi (2002) find that interest rates are high in Brazil due to the high levels of public debt.
Outward investment from Argentina decreased, reaching USD 1.2 billion in 2020. The US, Spain and the Netherlands represent more than the half of FDI inflows. Other main investing countries are Brazil, Chile, Switzerland, Uruguay, France, Germany and Canada.
- Credit score. Your credit score is a three-digit number that generally carries the most weight when it comes to determining your individual creditworthiness. ...
- Loan-to-value ratio. ...
- Debt-to-income.
What are the 4 factors that influence interest rates?
Demand for and supply of money, government borrowing, inflation, Central Bank's monetary policy objectives affect the interest rates.
- Savers seeking safety. The least-risky types of accounts — bank savings, credit union savings, and money market, to name a few — offer better yields when interest rates rise.
- Vacationers abroad. ...
- Retirees. ...
- Loan seekers. ...
- Credit ignorers.
Argentina's economy, which is one of the more powerful in the region, is dependent on services and manufacturing, although agribusiness and ranching dominated the economy for much of the 19th and 20th centuries.
With a Gross Domestic Product (GDP) of approximately US$490 billion, Argentina is one of the largest economies in Latin America.
Economic Forecast Summary (June 2022)
After a strong rebound in the second half of 2021, GDP is expected to rise by 3.6% in 2022 and 1.9% in 2023. A recent agreement with external creditors will lower policy uncertainty and help to reduce long standing macroeconomic imbalances gradually.
- Switzerland. The Swiss National Bank reported an unchanged benchmark of a three-month LIBOR of -0.75%. ...
- Denmark. The primary interest rate in Denmark is the certificate of deposit rate set by the Central Bank of Denmark. ...
- Japan. ...
- Sweden. ...
- Spain.
Foreigners are permitted to open a bank account in Argentina, as long as the appropriate paperwork is in order. It is possible to open an account in pesos as well as in dollars.
Yes, interest rates can be negative. Some countries have already implemented a negative official interest rate. These countries include Switzerland, Sweden, Denmark and Japan, along with the euro area.
To deposit money into an Argentinian bank account, you need to have your contact's: Bank name. Account type. Unique banking key (CBU) — found on your contact's bank statement.
Interest rates reached their highest point in modern history in 1981 when the annual average was 16.63%, according to the Freddie Mac data.
Which bank has best interest rate?
| Bank | Tenure | Interest Rates for General Citizens (per annum) |
|---|---|---|
| ICICI | 7 days to 10 years | 2.50% to 5.50% |
| Punjab National Bank | 7 days to 10 years | 3.30% to 5.25% |
| HDFC Bank | 7 days to 10 years | 2.50% to 5.50% |
| Axis Bank | 7 days to 10 years | 2.50% to 5.75% |
Since March 2022, besides the pandemic, there's another factor causing Argentinian inflation: The global rise in energy and food prices due to the war in Ukraine, which is noticeable throughout Latin America. The budget deficit will either be financed with debt or by printing money.
Inflation Rate in Argentina averaged 191.17 percent from 1944 until 2022, reaching an all time high of 20262.80 percent in March of 1990 and a record low of -7 percent in February of 1954.
Argentina's annual inflation surged past 70% last month, one of the fastest rates in the world, after renewed political turmoil fueled price spikes and a currency rout. Consumer prices rose 71% in July from a year ago, the highest level in about 30 years, according to government data published Thursday.
Argentina's currency board established a fixed pegging of one-to-one parity between the peso and the U.S. dollar. It also guaranteed full convertibility of pesos into U.S. dollars.
Economic Forecast Summary (June 2022)
After a strong rebound in the second half of 2021, GDP is expected to rise by 3.6% in 2022 and 1.9% in 2023. A recent agreement with external creditors will lower policy uncertainty and help to reduce long standing macroeconomic imbalances gradually.
Foreigners are permitted to open a bank account in Argentina, as long as the appropriate paperwork is in order. It is possible to open an account in pesos as well as in dollars.
These countries include Switzerland, Sweden, Denmark and Japan, along with the euro area. While the official interest rates that central banks set in those countries have gone negative, that generally doesn't mean that the interest rates on people's bank accounts have been below zero.
