Central Bank Increases Interest Rate To 97% To Tackle Inflation
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Loading... - Pippa Bruni
- 18 May 2023
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The Central Bank of Argentina has announced a substantial increase in its primary interest rate, raising it to 97 percent. This move aims to combat the surging inflation, which has reached its highest level in 30 years. According to a report from CNN, Argentina's inflation rate soared to 100 percent last month, even as central banks worldwide are implementing measures to tackle inflation.
Argentina's inflation has now reached a level not seen since the early 1990s, with only Venezuela and Zimbabwe experiencing higher inflation rates, as indicated by data from the International Monetary Fund. The central bank expressed hope that the rate hike would encourage investments in the country's currency.
Economy Minister Sergio Massa is primarily focused on preventing further devaluation of the currency and controlling inflation, particularly in light of the upcoming presidential election in October. Massa has been considered a potential third-party candidate since President Alberto Fernandez announced last month that he would not seek re-election. The success of Massa's efforts to combat inflation is likely to be tied to the outcome of this battle.
However, analysts reported that the recent interest rate hike is unlikely to have a significant impact on the Argentinian markets. "The general sentiment is that the government is losing the fight against inflation," stated Miguel Kiguel, a financial advisor and former deputy manager at the Central Bank of Argentina, according to CNN.
