By Jorge Otaola
BUENOS AIRES, March 10 (Reuters) - Argentina's central
bank is set to hold its benchmark interest rate steady at 75%
this month despite annual inflation nudging towards 100%, a
source at the bank with knowledge of discussions told Reuters on
Friday.
That would mark the sixth straight month of holding the
28-day Leliq rate unchanged after the central bank broke a long
tightening cycle in October last year.
The rate translates on an annualized basis to around 107%,
the source, a central bank adviser, said, adding that for now
that reduced pressure to hike interest rates despite inflation.
"It still keeps the rate positive against inflation," the
person said. "If inflation continues to be pressured, in April
it could be raised to help cool the economy, but it is a
week-by-week analysis," the person said.
A central bank spokesman did not respond to a request for
comment.
Argentina, a major grains producer, is grappling with high
inflation, low foreign currency reserves and tough capital
controls that skew the value of the local currency. Its key
grains production is also being hammered by drought.
The central bank hiked the benchmark rate all through last
year to 75% in September from 38% at the start of 2022.
"I also believe the central bank will be inclined to
maintain the benchmark rate in March, taking advantage of the
exchange rate calm," said local economist Gustavo Ber.
"But possibly in the future it will resume readjustment if
inflation continues to accelerate."
On Tuesday, the government will report inflation data for
February, expected to be around 6% for the month.
Argentina will hold presidential elections late this year
and has been trying to improve its debt profile with major local
debt swaps to push back repayments.
(Reporting by Jorge Otaola; Editing by Adam Jourdan and Sandra
Maler)
Messaging: adam.jourdan.thomsonreuters.com@reuters.net))
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