Argentina hikes interest rate again to save swooning peso
It is the second steep rate increase in less than a week as the peso crashes to an all-time low of 21.2 per US dollar
Buenos Aires — Argentina’s central bank raised its benchmark interest rate by 300 basis points to 33.25% on Thursday, the second steep rate increase in less than a week to shore up the country’s swooning peso currency. The peso closed at an all-time low of 21.2 per US dollar on Wednesday, the first trading day since the bank hiked the rate to 30.25% from 27.25% on Friday. The peso slid an additional 4% to 22.1 on Thursday, after the latest rate announcement. The central bank, which over the past week has abandoned its schedule of reviewing monetary policy every other Tuesday, said in a Thursday statement it would continue using all the tools at its disposal to achieve its 15% inflation target in 2018 and could raise the interest rate again. The government had adopted policies aimed at spurring economic growth ahead of President Mauricio Macri’s expected 2019 re-election bid. The perception of political pressure on the bank to grease economic activity by keeping the money tap open ha...
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