Argentine central bank hikes interest rate to 81% after inflation overshoot

By Eliana Raszewski, Jorge Otaola and Walter Bianchi

BUENOS AIRES (Reuters) -Argentina’s central bank board hiked the benchmark interest rate 300 basis points to 81% after inflation overshot expectations in March to hit 104% on an annual basis, the monetary authority said in a statement Thursday.

Reuters earlier reported, citing an official source, that the board had decided to raise the rate from its previous 78% level after a data release last Friday showed March inflation had clocked in at 7.7%, the highest monthly level in over two decades.

Argentina is battling a weakening peso currency that has hit record lows against the dollar in popular parallel markets, where it is worth around half the official exchange rate. Central bank reserves are also low.

Reuters reported earlier this month that board members had discussed the idea of another potential interest rate hike to help rein in one of the world’s highest inflation rates, which is driving up poverty and hammering the Peronist government.

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