Argentina hikes interest rate 550 bps after inflation overshoots
2022.09.15 19:48
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© Reuters. FILE PHOTO: Pedestrians pass by Argentina’s Banco Central (Central Bank) in Buenos Aires’ financial district, Argentina, January 8, 2018. REUTERS/Agustin Marcarian/File Photo
By Jorge Otaola
BUENOS AIRES (Reuters) – Argentina’s central bank hiked the country’s benchmark interest rate 550 basis points to 75% on Thursday, a day after inflation overshot forecasts to near 80% on an annual basis.
The hike followed a 950 basis points-raise in August of the 28-day Leliq benchmark rate, as the government tries to bring down spiraling prices that are hurting Argentines’ savings and salaries and denting the popularity of the Peronist government.
A positive real interest rate is also one of the points agreed between Argentina and the International Monetary Fund (IMF) in a new $44 billion loan deal that the country needs to meet its upcoming debt repayment obligations.
Reuters reported at the start of September, citing a source with knowledge of the discussions, that Argentina’s central bank was planning to hike the rate to 75% this month due to the high levels of inflation.
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