Central Bank of Argentina cuts interest rates to 60%

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Reuters – Argentina’s central bank has cut its benchmark interest rate from 70% to 60% per year, the monetary authority said on Thursday, the second cut in the base rate this month, as the government becomes increasingly confident. to contain inflation.

The interest rate cut comes amid the central bank’s growing optimism about reducing the monthly inflation rate faster than analysts expected, which is key to the country’s economic recovery, where prices are rising almost 300% a year. .

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The decision confirms an earlier report from Reuters, citing three local financial sector sources, who said the monetary policy-setting body had warned traders about the 10-point cut in a memo.

Two weeks ago, Argentina’s central bank cut its benchmark interest rate by another 10 percentage points, citing a “marked” slowdown in inflation amid a harsh and painful austerity campaign under new libertarian president Javier Milei.

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Milei’s strict fiscal policies have boosted investor sentiment in Argentina, boosting stocks, bonds and the peso, but poverty levels are rising along with the economic recession as activity, production and consumption fall.