The central bank of Argentina has announced a 10% increase in interest rates to 91% in an attempt to curb rising inflation and stabilize the peso. This follows last week’s decision to raise interest rates by 3% to 81%, as the country faced the prospect of inflation reaching 100%.
The news of the latest interest rate hike has already had a positive impact on the peso, which rose 1.3% to 463/468 against the black market dollar. However, it still remains much weaker than the official exchange rate of 222 per dollar.
While analysts have described the increase in interest rates as a positive step, some argue that it has come too late and may not provide a direct solution to the problem. With elections scheduled for October, the government is under pressure to increase spending, which could further exacerbate the inflationary pressures facing the country.
Despite the challenges facing Argentina, the central bank has expressed confidence that the latest interest rate hike will help to bring inflation under control and restore stability to the country’s economy. However, it remains to be seen whether these measures will be sufficient to address the underlying issues that have contributed to the current economic crisis.