Overview

• Posting on X on Monday, Economy Minister Luis Caputo said recent interest-rate increases are transitory and linked to the uncertainty around the September and October elections.
• He acknowledged a short-term hit to economic activity and projected a quick rebound after the vote, saying he expects a strong performance by LLA and a return to more normal rates from November.
• Caputo argued that rates are endogenous to strict money supply control, adding that if they were truly excessive market arbitrage would have pushed them lower.
• He attributed heightened market risk to recent Congressional moves he says jeopardized fiscal balance and predicted that such political risk will recede soon.
• His remarks responded to economist Fernando Marull’s criticism of “ridiculously high” rates and came as business groups reject the policy even as officials aim to prevent a rise in the dollar’s price.