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ECONOMY | 12-03-2020 22:33

Central Bank to pause run of rate cuts

Central Bank plans to keep its policy rate unchanged, as it weighs the impact of sell-off on world markets.

Argentina's Central Bank plans to keep its policy rate unchanged, as it weighs the impact of recent market turmoil spurred by the coronavirus, according to three people with direct knowledge of the matter.

The bank will leave the key rate at 38 percent, after cutting it eight times by a total of 25 percentage points since President Alberto Fernández took office in December.

The Central Bank's press office declined to comment.

Policymakers have slashed rates to try to revive the economy, which is on the verge of contracting for the third consecutive year. To try to contain inflation, the government has implemented price freezes on public transport, public services and some food, along with capital controls on the peso.

With an annual inflation rate of more than 50 percent, Argentines have little incentive to keep cash in the bank with prices that rise much faster than savings rates.

by Ignacio Olivera Doll, Bloomberg

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