Argentina could hike interest rate to 75 percent this month

BUENOS AIRES, Argentina: The local media is reporting that Argentina’s central bank could hike its benchmark interest rate to 75 percent this month, a 550 basis point jump from the current 69.5 percent.

The move is aimed at supporting the country’s currency, the peso, which is suffering from one of the world’s highest inflation rates.

Sources have said that the rate hike would depend on increases in the consumer price index (CPI), as annualized inflation is now running at over 70 percent and is estimated to reach over 90 percent by the end of the year.

After smaller adjustments earlier in the year, in recent months Argentina’s central bank has sharply raised the 28-day ‘Leliq’ from 800 and 950 bps.

Three analysts told Reuters they expected a hike this month of between 400 and 600 bps, against monthly inflation in August projected at 6 to 6.5 percent.

August inflation data will be released on 14th September.