MercoPress. South Atlantic News Agency
Argentina's central bank hikes interest rates to combat high inflation
“Core inflation has shown a persistence with which we're not completely comfortable,” central bank President Federico Sturzenegger said Argentina's central bank hiked interest rates on its short-term securities on Tuesday in its monthly auction, the second such increase in the past three months as it seeks to soak up pesos and rein in stubbornly high inflation.
The monetary authority sold 467.623 billion pesos (US$27.11 billion) in Lebac securities, compared with the 532.022 billion pesos worth of securities that matured. It raised the interest rate on the 28-day Lebac, the shortest-term security on offer, to 26.5%, up from 25.5% last month.
The central bank is targeting inflation of between 12% and 17% this year, well below economists' expectations for 21.5% inflation. The now refurbished and reliable stats office, Indec, reported that consumer prices rose 11.8% in the first half of the year.
“Core inflation has shown a persistence with which we're not completely comfortable,” central bank President Federico Sturzenegger told reporters on Tuesday. “This persistence of core inflation is what has obliged us, or driven us, or motivated us to harden our monetary policy stance.”
The central bank no longer considers the short-term Lebac yield as its benchmark interest rate, turning instead to the seven-day interbank lending rate at the start of this year. It hiked that rate to 26.25% in April and has since held the rate steady”.
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Read all commentsAt least the current government admits it has inflation issues. As opposed to the aggravated mendacity of a certain previous Peronist government.
Jul 19th, 2017 - 01:13 pm +2Greaseball Lorenzino:
https://www.youtube.com/watch?v=EkHGLkCYnMY
In the news - Argentina still [deficit] spending like a drunken sailor:
Jul 20th, 2017 - 04:09 am +2”Argentina posted a primary fiscal deficit of 144 billion pesos ($8.4 billion), or 1.5 percent of gross domestic product, in the first half of 2017... primary fiscal deficit was 103 billion pesos in the second quarter, compared with 41 billion pesos in the first quarter. .....total financial result, which includes payments on the public debt, was a deficit of 92 billion pesos in June, up 26.5 percent from the same month last year. In the first half of the year, the deficit including interest payments was 256 billion pesos, up 43 percent from the year-ago period. .....”
We all know how this is going to end, and it isn't well.
Maybe they can accelerate that inevitable next default, you know, buy some expensive but obsolete aircraft or something.
The man's talking nonsense, as do most politicians and central bankers -- the truth would put them out of business. Inflation is due to the increase in money and credit precipitated by the central banks facilitating their government's borrowing and spending beyond its means. The solution is a drastic, and permanent, cut in government spending, but the politicians aren't going to do that -- the borrowed money they can never repay buys them their power and positions.
Jul 19th, 2017 - 02:49 pm +1Commenting for this story is now closed.
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