2023-04-28 07:17:00
Fatima Shawky
Friday, April 28, 2023 10:17 AM
Argentine central bank approved (Bcra) Increasing the reference interest rate to 91% annually, from 81%, the second time in one month amid a 20% devaluation in the past five days, Argentine newspaper Infobae said.
The newspaper indicated that the procedure was announced through the electronic system “Siopel” Through which the banks of the system operate, amid an escalation in the unofficial rate of the dollar and the scenario of theHigh inflation in Argentina The new measure puts the South American country in second place on the list of the highest interest rates in the world, following Zimbabwe, which records an interest rate of 150%.
The newspaper pointed out that this increase, aimed at attacking inflation and devaluation of the currency that plagues the third largest economy in Latin America.
In just one week, the price of the “blue dollar”, that is, the price that is unofficially traded in the various unauthorized points of sale in the city of Buenos Aires, jumped by regarding 20% in just five days, and caused the rapid depreciation of the currency, which found the government In the midst of its internal strife and its focus on the mandatory primaries to be held in August, there is general panic among the population. While the “official dollar”, whose value is determined by the central bank, remained at half the unofficial reference value.
The government made a decision to intervene in the financial markets by using reserves that enable it to buy bonds in dollars and sell them for pesos, which has a direct impact on the unofficial rate of the foreign currency. However, this decision has a problem: it implies disobeying a clause of the agreement the country entered into with the International Monetary Fund (IMF).
In March, Argentina recorded the latest data monthly inflation of 7.7% and 104.3% year on year, up 1.8 percentage points from that recorded in February, a record high in the last 32 years.
And in 2022, the consumer price index closed at 94.8%, the highest level since 1991. However, market forecasts put inflation for 2023 at 110% annually, according to a recent survey by the National Institute of Statistics.
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