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%.
With trading much more relaxed on Friday ended the several days of money market uncertainty leading to Argentina Sunday´s primary election, an anticipation of what can happen in the midterm elections of 22 October when President Mauricio Macri's economic reforms will be put to test in the polls, and hopefully his coalition will increase its congressional support.
Argentina's Peso rose against the dollar on Monday for the first time in two weeks, after the central bank intervened in the foreign exchange markets on Friday to halt the currency's rapid decline to historic lows, when it reached 18 Pesos.
Argentina's economy grew 0.8% on the first quarter of the year compared to the same period last year, Central Bank Governor Federico Sturzenegger said, declaring that since President Mauricio Macri took office employment has remained “stable.”
The Argentine government will issue bonds worth US$5 billion to be auctioned this week to pay back debt from imports during the previous Cristina Fernandez administration, according to a resolution published by the current government.
Argentine finance minister Alfonso Prat-Gay announced on Friday that next week levies on farm (grains and oilseeds) exports will be lowered, the half year bonus of wage earners if below 30.000 Argentine Pesos will be exempt from income tax, and the policy of looked-after prices at supermarkets will continue.
Argentina confirmed it will be using Central Bank foreign-currency reserves to service more than US$3.5 billion dollars in international debt that matures in October. The confirmation came through an announcement in the Official Gazette, signed by President Cristina Fernández, Cabinet Chief Anibal Fernández and Economy Minister Axel Kicillof.
Lawyers representing the Argentine government and the Central Bank have defended the country's stance on the debt conflict in a hearing with the New York Second Circuit Appeals Court, rejecting the notion that holdout investors could confiscate reserves or assets belonging to the financial entity.
The head of Argentina's Central Bank Alejandro Vanoli reaffirmed that “there won’t be a devaluation” of the Peso next year and stressed that the government of President Cristina Fernandez will not give in to pressure from the financial market and the export sector.
The Argentine government has strengthened its control over the expenditure and income of currency in foreign trade through the creation of the Tracking and Tracing of Foreign Trade Transactions Unit, responsible for monitoring “prices and quantities of exported and imported goods and services, as well as foreign currency income/expenditures.”