Argentina: Central Bank hikes interest rate again in August
On 11 August, the Central Bank of Argentina (BCRA) decided to hike the LELIQ rate to 69.50% from 60.00% in a bid to tame inflation, anchor inflation expectations and sustain the peso. Moreover, the Bank hiked a series of secondary rates.
The Bank increased rates further due to a jump in inflation, rising inflation expectations and sustained financial volatility. Inflation spiked to 71.0% in July from 64.0% in June. The current monetary policy stance of the BCRA is framed in an agreement with the IMF; the country has committed to move gradually towards positive real interest rates. The Central Bank added that it is broadening its efforts to coordinate with the Ministry of the Economy.
Looking ahead, the Bank hinted at further “calibration” of the key interest rate amid the gradual normalization of its monetary policy stance.