BUENOS AIRES Oct 17 Argentina's state-run bank
said it lowered its headline interest rates for loans to
businesses on Monday amid expectations that inflation will begin
to slow in Latin America's third-largest economy, a move that
will help put credit back within firms' reach.
Banco Nacion, the country's largest financial institution,
set its annual nominal reference rate for business loans at 27
percent, down from 32 percent. The bank said it has also set
aside $330 million for loans to small- and medium-sized
businesses at a discounted rate of 15 percent.
"We've made this decision with the conviction that gradually
we will have a substantial improvement in the general economy,
with inflation trending lower," said Carlos Melconian, president
of Banco Nacion.
Inflation in Argentina is expected at 39.6 percent for
full-year 2016, according to a central bank poll of analysts.
That has resulted in high interest rates on loans, making credit
unaffordable for many companies.
But that same poll showed a median forecast of 20 percent
inflation in 2017, when the economy, currently mired in
recession, is expected to return to growth.
The 10-month-old administration of President Mauricio Macri
is applying orthodox economic policies following eight years of
free-spending populism under the previous leader, Cristina
Macri has eliminated currency controls and grains export
taxes, lowered utility subsidies and settled a long-standing
lawsuit with bond-holders that had kept the country in default.
But the expected surge in investment has been slower to
arrive than thought.
(Reporting by Walter Bianchi; Writing by Luc Cohen; Editing by