Argentina’s central bank hikes interest rate by 200-300 basis points – source


Band Jorge Otaola

BUENOS AIRES, Feb 17 (Reuters)Argentina’s central bank plans to raise interest rates by 200 to 300 basis points amid stubbornly high inflation officially A source with direct knowledge of the plans told Reuters on Thursday that it would be the second increase this year.

The bank raised interest rates by 200 basis points to 40% in January after keeping rates stable for over a year despite rising prices that the government has struggled to contain. Annual inflation is over 50%, resulting in savings.

TThe hike, which traders expect to take place later Thursday at the central bank’s weekly meeting, would take the 28-day interest rate to 42% to 43% and comes amid other tightening cycles, including in Peru, Chile and Brazil .

Argentina’s government is currently negotiating details of an agreement with the International Monetary Fund (IMF) to refinance over $40 billion in debt that the grain-producing country is unable to repay.

The terms of this deal, which may require the approval of Argentina’s Congress and the IMF’s Board of Directors, are expected to include plans to lower inflation and move toward positive real interest rates.

Argentina: interest rates vs. inflation

Argentina: Interest Rates vs. Inflation (Interactive Version)

(Reporting by Jorge Otaola; Writing by Adam Jourdan; Editing by David Gregorio)

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