WORLD Argentina ramps interest rate to 97% as inflation soars


Argentina ramps interest rate to 97% as inflation soars


07:36, May 16, 2023

Argentina's central bank on Monday hiked its base interest rate by six points to 97 percent as the government prepares to announce a spate of measures to tackle soaring inflation.

It is the second time in less than a month that the bank has ramped up interest rates as year-on-year inflation hit almost 109 percent in April.

Men walk in front of the central bank at the financial district during a government-ordered lockdown to curb the spread of COVID-19 in Buenos Aires, Argentina, Thursday, May 21, 2020. (Photo: AP)

In a statement the central bank said the move aimed at "preventing financial volatility from acting as a driver of inflation expectations."

Local media claim the government will announce a raft of measures over the coming week, such as an intervention in the exchange rate and facilitating imports to bring down prices.

The measures were prepared at the weekend during a meeting headed by Economy Minister Sergio Massa aimed at finding a way to tackle Argentina's economic woes just months out from a general election.

Latin America's third largest economy is in turmoil.

The peso lost 20 percent of its value against the dollar in a single week in mid April.

It briefly fell to 500 to the dollar on the informal exchange rate -- about double the rate of the official one -- before stabilizing at 470.

The central bank responded by pushing up interest rates by 10 points to 91 percent.

Inflation hit its highest level in three decades in 2022, finishing the year on 94.8 percent.

But it has kept on climbing and reached almost 109 percent year-on-year in April.

The cost of living has risen by 31 percent since the start of the year.

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