Argentina’s central bank raised the country’s benchmark interest rate by 2 percentage points last Tuesday (22) to 44.5%, the third increase this year, as banks watch out for soaring inflation and the supply shock. global.
The central bank said it will seek to place the benchmark rate on the path of “positive real returns on investments in local currency and preserve monetary and exchange rate stability”, indicating higher rates with inflation above 52%.
Argentina, a major grain producer, recently struck a $45 billion deal with the International Monetary Fund with economic targets attached, including a shift to positive real interest rates.
The agreement, crucial to stabilizing the country’s economy and eventually reopening access to global financial markets, must be approved by the Fund’s board when it meets next Friday.
The central bank said the global scenario of rising grain and energy prices is impacting domestic inflation.
“The world economy is facing a supply shock that translates into extraordinary price increases for all commodities and other important products in the production chain,” the monetary authority said.
Source: CNN Brasil
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