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Argentina's Leliq rate hits floor level of 68%

The interest rate paid on Banco Central de la República Argentina's daily auction of Leliq notes hit its floor level of 68%, coming off a peak of 86% in mid-September.

Argentine markets were roiled by the Aug. 11 primary elections in Argentina, which triggered a rapid escalation in the reference rate to an 86% peak on Sept. 10, as the Argentine peso went through strong depreciation.

Return on Leliqs has fallen by nearly 20% since then, but minimum rate levels decided by the BCRA for October will likely put that marginal easing on hold at least until the end of the month. The 68% floor set by the BCRA could be modified by the regulator if it believes that pressures on the peso have eased sufficiently.

However, local economist Gabriel Caamaño stated it was "prudent" to sustain current levels and avoid further easing in order to keep depreciation pressures at bay, El Cronista reported.

Argentina's presidential elections on Oct. 27 could also affect the volatility of exchange rates.