Argentina's Central Bank raises key rate to 47% as inflation soars
Central Bank raises interest rates for the fourth time this year after inflation data shows prices increasing at the fastest monthly pace in 20 years.
Argentina’s Central Bank raised interest rates for the fourth time this year after inflation data published earlier in the day showed prices increasing at the fastest monthly pace in 20 years.
The monetary authority increased its benchmark Leliq rate by 250 basis points to 47 percent, according to a statement distributed Wednesday evening. The rate hike also boosts the effective annual rate, which accounts for compounded interest, to 58.7 percent, putting it above current annual inflation of 55.1 percent.
Central Bank officials raised rates after the INDEC national statistics bureau published data showing prices rose 6.7 percent in March, the fastest monthly pace since 2002.
The surge of international food and energy prices as a result of Russia’s invasion of Ukraine combined with local factors, such as a fuel price increase and an accelerated pace of devaluation for the official peso, led to the more robust inflation in March.
Argentina is also raising rates to comply with its US$44.5-billion International Monetary Fund agreement, which calls for the government to keep interest rates, measured by the effective annual rate, above inflation.
related news
-
Emilio Monzó: ‘Today fear is so strong that it has wiped out leaders with identity’
-
Loading the bases
-
Milei’s calculated risks
-
Stories that caught our eye: April 26 to May 3
-
Media watchdog says press freedom has deteriorated under Milei
-
EU-Mercosur deal is ‘win-win,’ says Poland’s ambassador to Argentina
-
MercadoLibre weathers Argentina tumult with Mexico, Brazil gains
-
Argentina given roadmap for OECD ascension
-
City officials to meet investors as Buenos Aires weighs global bond sale
-
Central Bank cuts rates to 50% as Milei wrestles inflation down