UPDATE 3-Argentina changes inflation target methods, keeps weekly schedule

lunes 26 de septiembre de 2016 19:35 GYT

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By Luc Cohen

BUENOS AIRES, Sept 26 (Reuters) - Argentina's central bank will continue to set its policy rate on a weekly basis in 2017 but will no longer tie the rate to short-term Lebac securities, central bank chief Federico Sturzenegger said on Monday.

The reference rate will now be the seven-day interbank lending rate, which the central bank will determine weekly. Some analysts had expected the central bank to move to monthly monetary policy decisions, as in many developed economies.

"This will give greater stability to reference rate prices," Sturzenegger told reporters.

The bank is seeking to contain inflation that economists see at around 40 percent in 2016, also a priority of center-right President Mauricio Macri, who appointed Sturzenegger and has introduced a number of market-oriented reforms since taking office in December.

The bank will auction off Lebac on the third Wednesday of every month rather than every week, he said. The market currently treats the interest rate on the 35-day debt note as the reference rate.

Disassociating policy rates from debt issuance is a welcome step as the central bank seeks to normalize its policies, said Federico Furiase, an economist with consultancy Estudio Bein & Asociados in Buenos Aires.

While weekly rate decisions remain abnormal by world standards, regular communication with markets could help the central bank restore credibility, he said.   Continuación...