4 ms·

That's bad then: nominal interest rate should be greater than the perceived inflation rate. What does this interest rate hike achieve then? I think, it creates

• treesciencebot 3y ago
  Interest rates are a mean to control the expected inflation, not the realized one. The expected inflation for 2024 is 36%, which means the current interest rates are sufficient to settle it.
  • dizhn 3y ago
    That would be true if the government instutition in charge of determining actual inflation wasn't fudging the numbers. I was actually suprised to see people discussing this interest increase like it means something.
    • treesciencebot 3y ago
      Both announced and the expected inflation (especially after the changes in the central bank admin, since May) numbers have been globally recognized both by local independent groups (most known one is ENAG) and international financial institutions. Where did you end up with this idea of inflation number not meaning anything?
• unsupp0rted 3y ago
  They can’t explode the interest rate from 8% to 60% over night. This is the latest in half a dozen incremental increases, each one very high by western standards (but each one tiny relative to inflation). Now they’re finally approximately in the range of “this might actually have some useful effect”.
  • dizhn 3y ago
    They've had to become this drastic because they refused to do it and decreased it instead when exchange rates & inflation were already getting out of hand and relatively small adjustments could have had an effect. It was a weird religious belief and personal "feelings" of the president, who calls himself an economist (among other things).