Banco Central de la República Argentina has reduced the floor of the benchmark Leliq interest rate by 5 percentage points to 58%, citing changes to the country's political and economic outlook.
In a press release, the central bank said the "magnitude of the reference interest rate is at an inappropriate level and [is] potentially inconsistent with the prospects of nominal evolution of the relevant economic variables."
The monetary authority also said the management of debt sustainability in terms of pesos will probably lead to changes in interest rates.
Meanwhile, the government also postponed the payment schedules for the entirety of its Letes short-term dollar-denominated debt to Aug. 31, 2020, according to a decree published Dec. 19 in the Official Gazette.
The decree did not specify the current stock of Letes, but market sources estimate it to be about $9 billion, according to an El Cronista report.
Former President Mauricio Macri's administration had already pushed back the financial instrument's scheduled repayments in August, but with approximately $367 million set to mature between Dec. 20 and 23, the newly elected government of President Alberto Fernández has decided to delay payments once more.
The move is part of a wider-reaching set of economic measures through which Fernández's government expects to boost revenue to fulfill its debt obligations.