Argentina’s Key Interest Rate Was Raised to 69.5% – The bank raised its benchmark rate for a 28-day deposit by 9.5% percentage points, making this the second increase in as many weeks.
This comes as recent statistics showed that the country’s inflation rate has reached a 20-year high of nearly 70%.
After the most recent data from the US showed that inflation had slowed, people’s hopes that price increases had reached their pinnacle were shattered by the numbers.
The bank said in a statement that “the increase in the policy rate will assist decrease inflation expectations for the remainder of the year.” This was in reference to the increase in the interest rate.
The move comes two weeks after the bank increased the rate by 8 percentage points, and it represents the bank’s eighth rate increase of the year.
It is anticipated that the annual rate of inflation would reach above 90% by the time the year comes to a close.
The most recent minister of Argentina’s economy, Sergio Massa, has prioritized bringing inflation under control, reducing the country’s high levels of debt, and cutting back on wasteful expenditure as one of his first orders of business in South America’s second-largest economy.
Mr. Massa, who is the third person to hold the role since the beginning of the previous month, intends to calm inflation using a method that is more conventional than the one that his predecessors used.
In addition to the increase in interest rates, he has promised not to ask the central bank to produce any more money this year in order to pay the expenditures of the government.
After serving in that capacity for more than two and a half years, Martin Guzmán tendered his resignation as the Minister of Finance in July. His successor Silvina Batakis was only in office for one month before she resigned.
In the beginning of this year, Argentina avoided defaulting on a loan from the International Monetary Fund that was worth $44 billion.
However, the impact of the measures that the government is required to adopt in order to meet the criteria of the deal is a big cause of concern for many people across the nation.
In the most recent weeks, people have resorted to the streets of Buenos Aires, the nation’s capital, to voice their disapproval of the way in which the economy is being managed by President Alberto Fernández.
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