Reuters reported earlier this month that central bank board members were discussing another interest rate hike to rein in one of the world's highest inflation rates. Analysts had estimated the hike would be 200 basis points. A central bank poll forecasts inflation will end this year at 110%, while J.P. Morgan estimates it could hit 130%. In a statement, the central bank said it would "continue to monitor the evolution of the general level of prices, the dynamics of the exchange market and the monetary aggregates for the purpose of calibrating its rate policy." <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Argentina: inflation spirals Argentina: inflation spirals (Interactive) ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Eliana Raszewski, Jorge Otaola and Walter Bianchi; Editing by Adam Jourdan, Angus MacSwan, Deepa Babington and Cynthia Osterman)
Messaging: adam.jourdan.thomsonreuters.com@reuters.net)) (Adds background, central bank comment, graphic)
By Eliana Raszewski, Jorge Otaola and Walter Bianchi
BUENOS AIRES, April 20 (Reuters) - Argentina's central
bank hiked the benchmark interest rate a sharper-than-expected
300 basis points on Thursday after inflation soared past
expectations in March to hit 104% on an annual basis, the
monetary authority said in a statement.
Reuters earlier reported, citing an official source, that
the board had decided to raise the reference rate to 81% from
its previous 78% level after March inflation data had clocked in
at 7.7%, the highest monthly level in two decades.
The hike extends a new round of tightening by Argentina's
central bank, which is fighting soaring prices and dwindling
foreign currency reserves, while the peso currency has hit
record lows against the dollar in parallel markets. Drought has
battered exports of the country's main cash crops soy and corn.
The bank hiked the benchmark rate 300 basis points in March,
the first raise since September at the end of a vicious
tightening cycle through most of 2022. The bank had wanted to
cut rates this year on hopes inflation would cool.
Inflation, however, has gained pace again, driving poverty
levels to near 40% and hurting the Peronist government of
President Alberto Fernandez, which lags the conservative
opposition in public opinion polls ahead of October elections.
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