Central Bank to boost rates by 600 basis points as inflation soars

Argentina is preparing a set of emergency measures, including raising its key interest rate by 600 basis points to 97 percent on Monday, as inflation spirals out of control in the run up to presidential elections, according to officials at the Economy Ministry and the Central Bank.

The Central Bank will raise its benchmark interest rate while boosting intervention in the foreign exchange market in a bid to limit a sel-loff in the peso, which weakened 13 percent against the dollar last month, the officials said, asking not to be named before measures are formally announced by Economy Minister Sergio Massa.

At the same time, the government intends to obtain more international support for its dwindling foreign reserves by speeding up deals with the International Monetary Fund, China and Brazil through the BRICS group, which also include Russia, India, China, and South Africa, one of the officials said.

The measures come after April inflation data published Friday afternoon showed prices rose 108.81 percent from a year ago, far above market expectations and the highest level since 1991.

The monetary authority has recently raised rates by 10 percentage points to 91 percent.