Argentina jacks up interest rates to 75% in attempt to hold down sky-high inflation
Year-over-year inflation rate reportedly nears 80%
The Argentinian national bank this week raised interest rates to 75% in a desperate bid to tamp down on the country’s still-spiraling consumer inflation rate.
The Banco de la Nación Argentina hiked the rates after national data indicated a year-over-year inflation rate of just under 80%, a crushing spike that has desperately squeezed consumers in the South American country.
The bank told Bloomberg that its board of directors “intends to reduce the level of short-term debt held by the central bank next year,” the outlet reported.
Adriana Dupita, an economist with Bloomberg specializing in Latin American economies, said in the outlet’s report that the hike “catches up with the rise in current and expected inflation” but “may not be sufficient to tame inflation or boost reserves.”
“The substantial uncertainty on inflation and the persistent risk that the peso may soon see a sharper depreciation undermine the ability of the new rate to convince households to save or investors to have a position in pesos,” she said.