Cabinet Chief Jorge Capitanich today announced that the Central Bank would begin to regulate “extortionate” interest rates in the financial system.
“It’s important that people know the state will intervene to deal with this issue,” said Capitanich at his daily press briefing this morning. “It’s time for the Central Bank to regulate interest rates so banks stop charging consumer extortionate rates.”
Interest rates rose sharply at the beginning of the year as part of the shift in economy policy to cool inflation and reduce capital flight. However, while interest on short-term deposits currently stands at around 22%, annual interest charges on loans and credit cards are frequently above 50%, and in some cases reach above 100%.
“They aim to take away some of the purchasing powers of consumers, so as to impact the economic growth rate,” added Capitanich.
Details of the new regulations will likely be released by the Central Bank in the coming days. Financial newspaper Cronista said it had obtained advanced information that limits would be applied to interest on all types of credit. The new measures will seek to reduce the difference between the interest rates offered by the Central Bank to the private sector, and those offered by commercial banks to consumers.
This morning, Capitanich also criticised “opposition and concentrated media groups” for trying to undermine confidence in the new official inflation index in order to destabilise the economy. “They use inconsistent methodologies that do not have a hint of reality, with the goal of trying to benefit the Argentina financial system,” said the cabinet chief.