The monetary authority maintained the 28-day Leliq rate at 118% despite the sharp acceleration for inflation in August and the deteriorating inflationary outlook. In an short statement, the central bank highlighted that inflation accelerated in August to 12.4% MoM, driven by the depreciation of the exchange rate. However, the monetary authority added that high frequency data shows a deceleration in the acceleration of prices since the peak in the third week of August.
Our monetary policy rate (Leliq) forecast stands at 145% for year-end. In our scenario, we assume a sharp correction of the nominal exchange rate in December (to 670 ARS/USD), shortly after the new administration has taken office. Given the expected depreciation of the ARS, we now project a year-over-year inflation rate of 200% by year-end.