By Jorge Otaola
BUENOS AIRES, April 12 (Reuters) - Argentina central
bank board have been discussing the idea of another potential
interest rate hike from the current 78% level, an adviser to the
bank said on Wednesday, with analysts anticipating a
200-basis-point raise to contend with annual inflation running
at over 100%.
The possible hike would be the second in a row after a sharp
rise in the benchmark rate last month when rampant inflation
forced the bank to tighten monetary policy, dashing earlier
hopes of an economy-boosting cut if prices cooled.
"The possibility of a new rate rise has been raised, but it
is not yet defined," an advisor to the central bank told
Reuters, asking not to be named as the discussions were private.
A central bank spokesman declined to comment. The bank board
normally meets on Thursday though it may wait for March
inflation data due at the end of the week before making any
decision.
Analysts, however, unanimously agreed another hike was
likely, with monthly inflation for March expected to have
accelerated to above 7%, the fastest since July last year.
"Most probably the central bank will raise the reference
rate again and continue betting on the nominal race: rate versus
inflation, which could help buy time," said Eugenio Marí,
economist at the Libertad y Progreso Foundation.
He added, however, that this would "continue to worsen" the
bank's balance sheet, with fewer reserves and greater debt.
Fausto Spotorno from Orlando Ferreres y Asociados, said the
rate would likely be hiked, despite the negative impact higher
rates have on economic growth. Argentina is battling poverty
near 40% and a wobbly peso currency.
Gustavo Ber, from Estudio Ber, said that "the central bank
should raise the rate again under a gradual and staggered
strategy to cushion the impact on economic activity". He agreed
the rate would likely rise to 80%.
Argentina, heading towards crunch elections in October, is
battling to meet economic targets in a $44 billion loan deal it
has with the International Monetary Fund (IMF), including
building up foreign currency reserves, cutting inflation and
having positive real interest rates.
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(Reporting by Jorge Otaola; Editing by Adam Jourdan and by
Sandra Maler)
Messaging: adam.jourdan.thomsonreuters.com@reuters.net))
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