By Enyichukwu Enemanna
The Central Bank of Argentina has announced an increase in its key interest rate by six percentage points, bringing it to 97 per cent in an effort to fight the galloping inflation that has reached a 30-year high.
According to a CNN report, the inflation rate in Argentina last month soared to 100 per cent, even as central banks across the globe continue to roll out policies to rein on inflation.
The inflation rate in the country has hit a new level since the early 1990s, and currently, Venezuela and Zimbabwe are the only two countries experiencing higher inflation than Argentina, according to International Monetary Fund data.
In a statement on Monday, the central bank also said that it is hoping the rate hike will incentivise investments in the country’s currency.
Ahead of a presidential election in October, Economy Minister Sergio Massa is focused on avoiding further devaluation of the currency and containing inflation.
He has been seen as a potential third-party candidate since incumbent President Alberto Fernandez announced last month that he won’t seek re-election, and Massa’s success is likely to be tied to the result of this inflation-battling plan.
But the new rate hike is unlikely to bring any real change to Argentinian markets, analysts said, CNN reported.
“The feeling is that the government is completely losing it against inflation,” said Miguel Kiguel, a financial adviser and former deputy manager at the Central Bank of Argentina.
