MercoPress. South Atlantic News Agency
Argentina central bank holds benchmark rate at 27.25%; inflation data on Thursday
The central bank lowered rates in each of the prior two decisions it had taken since government loosened its 2018 inflation target to 15%, from 8-12% previously Argentina’s central bank held its benchmark seven-day interbank lending rate at 27.25% on Wednesday, the monetary authority said in a statement, amid an increase in inflation expectations and “mixed signals” in prices so far this year.
The central bank had lowered rates in each of the prior two decisions it had taken since the president Mauricio Macri administration loosened its 2018 inflation target to 15%, from 8-12% previously. The bank had said that change allowed it to moderate its contraction bias.
But the monetary authority’s monthly survey of economists published earlier this month revealed that median inflation expectations had increased to 19.4% for 2018, up from 17.4% previously and well above the government target.
“Given that high-frequency indicators show mixed signals regarding the evolution of prices in the first weeks of the year, the central bank decided it should act cautiously,” the statement read.
Argentina’s official Indec statistics agency is expected to publish January inflation data on Thursday. Consumer prices rose 24.8% in 2017, well above the government’s target range of 12-17% inflation.
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Read all commentsDuring his 2015 election campaign, Mauricio Macri said inflation was the “easiest thing” he would have to do if elected.
Feb 16th, 2018 - 08:09 pm -1He also announced that, at the end of the second year of his term, inflation would be in the single digits.
Of course, talk is cheap.
Now, Macri and Co. are attempting to keep wage increases for the current year at 15 per cent--even when everybody agrees inflation is on its way to be 20 to 25 per cent.
Incredibly, the government says increasing wages may fuel inflation.
However, no comparable sacrifice has been asked from the country's wealthiest.
Which for those who are aged enough is a remake of an old, well-known, sad movie.
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