The central bank raised the interest rate on term deposits from 91 to 97 percent, its second sharp rise in a month, in a bid to "prevent financial volatility from acting as a driver of inflation expectations," it said in a statement.
Several other measures, particularly for small and medium-sized enterprises, intervention in the foreign exchange market, and facilitation of certain imports to reduce the price, are expected to be announced in the week, according to local media. The Ministry of Economy had not yet formalized others at midday on Monday.
This series of measures was prepared at a meeting this weekend around Economy Minister Sergio Massa, as a counter-attack after several particularly feverish weeks for Latin America's third-largest economy, amid uncertainty linked to the holding of general elections in October.
In mid-April, the Argentine currency, the peso, had experienced a spectacular crumbling, losing in one week 20% of its value, falling around 500 pesos to the dollar at the informal rate, (almost double the official rate) before recovering to around 470 pesos.
At the checkout of a supermarket in Buenos Aires, May 3, 2023 © STR / AFP / Archives
The interest rate was subsequently increased by 10 points, to 91%, making it one of the highest in the world.
And last week, inflation, which had broken a three-decade record in 2022 (at 94.8%), continued its spiral with the publication of the April index, +8.4% over one month, bringing inflation to 108.8% over one year. The cumulative increase in the cost of living since January 1st has reached 32%.
The central bank said in its statement on Monday that it will "continue to monitor the evolution of the general price level, the dynamics of the financial and foreign exchange markets, and monetary indicators, in order to calibrate its interest rate policy".
© 2023 AFP