Argentina raised its benchmark rate on Thursday for the first time since September after annual inflation surpassed 100 percent last month, according to a statement.
The Central Bank raised the benchmark Leliq rate by 300 basis points to 78 percent.
The monetary authority's board considered the hike in response to accelerating inflation and after leaving the key Leliq rate unchanged for several months.
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 from a 3,000 percent hyperinflation. Triple-digit inflation now puts additional pressure on the economy, which is expected to enter recession this year ahead of the October presidential elections.
The government reached a staff-level agreement on March 13 with the International Monetary Fund on the fourth quarterly review of its US$44 billion programme. The IMF agreement requires Argentina to keep interest rates above inflation in real terms.
In its last monetary policy statement on February 16, the Central Bank had attributed faster inflation to seasonal problems and explained that interest rates remained positive in real terms.
by Ignacio Olivera Doll, Bloomberg