Argentina’s central bank raised its benchmark interest rate by 300 basis points to 33.25% percent on Thursday, but the second steep rate increase in less than a week failed to stop the country’s peso currency from swooning to a record low. The local currency tumbled 7.83% to 23 per U.S. dollar. It had hit 21.2 to the greenback on Wednesday, the first trading day due to a holiday after the bank hiked the rate to 30.25% from 27.25% on Friday.
Argentina’s peso currency closed down 3.11% on Wednesday at an all-time low of 21.2 per U.S. dollar, even as the central bank continued selling dollars to try to halt the slide of the local currency, traders said. The currency’s sustained weakening showed a lack of investor confidence in Latin America’s third largest economy, which is blighted by one of the world’s highest inflation rates.
Argentina’s central bank held its benchmark interest rate at 27.25% on Tuesday, reiterating in a statement that high-frequency indicators suggested core inflation would remain high in April, but below March levels.
Argentina’s central bank would raise interest rates if inflation does not fall “a lot” beginning in May to a level consistent with its 2018 target for a 15% rise in consumer prices, central bank Governor Federico Sturzenegger said on Monday.
Argentina's central bank left the basic interest rate unchanged at 27.5%, a clear signal that inflation remains the main challenge of the country's monetary policy. The bank also revealed that last week it intervened in the local market with 400 million dollars to keep the US dollar in the range of 20/20,50 Pesos to the greenback.
The Argentine powerful teamsters union will be holding their first political rally in downtown Buenos Aires this Wednesday in a clear defiance of President Mauricio Macri's policies to combat inflation, launch the economy and attract foreign direct investors. Hugo Moyano a member of the unions' umbrella organization has promised to convene some 300.000 workers and has anticipated that any incidents will be the responsibility of the government.
The Wall Street Journal has published a piece on the political situation of Argentine president Mauricio Macri, battling inflation, an undelivered electoral pledge, and allegedly very much aware of a long standing spell: no non Peronist president has been able to complete the mandate for which he was elected.
Consumer prices in Argentina rose 24.8% in 2017 after a sharp 3.1% increase in December, government data showed on Thursday, well above the central bank's target range for annual inflation of 12-17%t. The monthly reading, which was above median expectations in December of 2.5%.
Argentina’s central bank cut its policy rate to 28% from 28.75%, two weeks after relaxing its 2018 inflation target, the bank said on Tuesday. The bank’s first rate cut in 14 months came after a December 28 news conference announcing an official inflation target for this year of 15%, up from the bank’s previous target range of 8% to 12%.
The International Monetary Fund (IMF) on Friday raised its outlook for Argentina’s economic growth to 2.8% in 2017, up from 2.5% seen in October, while keeping its forecast for 2018 growth steady at 2.5%.