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Argentina may raise interest rate to 75% this month: source

Argentina’s central bank could raise the benchmark interest rate to 75% this month, a source with direct knowledge of the board’s discussions said on Thursday, in a bid to support the local currency amid one of the biggest world inflation rates.

The move would represent a jump of 550 basis points from the current level of 69.5%.

The source, who declined to be named because the talks are private, said the rate hike would depend on the rise in the consumer price index (CPI), with annualized inflation running at more than 70% and estimated at more than 90% until the end of the year.

“Retail price developments are being closely monitored, and another rate hike is not ruled out to accompany the upcoming August CPI data and beat inflation,” a central bank adviser told Reuters.

“It is an issue that is discussed in the board and no decision has been taken, but it would not be unreasonable if the rate could rise to 75%,” the source added.

A central bank spokesman declined to comment.

Source: CNN Brasil

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