Argentina’s stubbornly high inflation accelerated again in February, the government said on Thursday, sparking the central bank chief to pledge new measures to rein in rising prices that have dogged the South American economy over the last year.
Inflation rose 3.8% in February, the National Institute of Statistics and Censuses (INDEC) said, as President Mauricio Macri struggles to bring down prices ahead of key national elections this year.
The rise marked the second straight month where inflation has accelerated, underscoring the challenge facing Argentina’s leadership who are battling to stem a slide in the peso, rein in inflation and dig the country out of a recession.
Argentina’s central bank president Guido Sandleris held a press conference later in the day, slamming “too high” inflation and promising new measures to curb one of the steepest inflation rates in the world.
Sandleris said the central bank would extend its goal of zero growth in the monetary base to the end of 2019 but would not freeze the exchange rate as a measure to lower inflation.
He added a non-intervention trading band for the peso agreed with the International Monetary Fund last year would be tweaked so it depreciated more gradually than the current track.
The band, which sets an upper and lower limit for the peso to trade against the dollar, will depreciate at 1.75% per month starting from the second quarter versus 2% currently - meaning it should guide the peso lower more slowly.
The February inflation increase, the sharpest since October, took 2019 year-to-date inflation to 6.8%, and rolling 12-month inflation in the month was 51.3%, INDEC said.
Fueled by a weak peso, consumer prices in Argentina rose 47.6% in 2018, which analysts said was the highest annual rate in nearly three decades, hitting the country’s spenders as wage growth failed to keep apace.
Earlier this month economists raised their forecast for 2019 inflation to 31.9% from a previous estimate of 29.0%.