Monday, March 20, 2023
Perfil

ECONOMY | 16-03-2023 08:58

Argentina considers first rate hike since September after inflation hit 103%

Argentina’s Central Bank is considering raising its benchmark rate for the first time since September, according to two people with direct knowledge.

Argentina’s Central Bank is considering raising its benchmark rate Thursday for the first time since September after annual inflation surged above 100 percent last month, according to two people with direct knowledge.

The monetary authority’s board will consider an increase after leaving the key Leliq rate unchanged at 75 percent for several months, the people said, asking not to be named discussing internal decisions. The board hasn’t decided on the size of the hike in case they opt for such move, they said.

On Thursday, the board will also discuss other measures in response to rising inflation, one of the people said. A Central Bank spokesman declined to comment. 

Consumer prices rose 102.5 percent in February from a year earlier, one of the highest rates in the world and the fastest pace in Argentina since late 1991, when the economy was cooling down from 3,000 percent hyperinflation. Triple-digit inflation now is putting extra pressure on the economy, which is expected to fall into recession this year before presidential elections in October.

The potential policy move also comes in the wake of the government reaching a staff-level agreement on March 13 with the International Monetary Fund on the fourth review of its US$44-billion programme. 

In its last monetary policy statement Feb. 16, the Central Bank had attributed faster inflation to seasonal issues and explained that interest rates were still positive in real terms. 

by Ignacio Olivera Doll, Bloomberg

Comments

More in (in spanish)