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Argentina’s central bank keeps interest rates on hold despite strong inflation rise in August



The company kept monetary policy rates unchanged, even though inflation accelerated significantly in August to 12.4%.

Argentina’s National Institute of Statistics and Census (Indec) reported a monthly inflation rate of 12.4% in August. 124.4% compared to previous year the Board of Directors of the TransAndean Central Bank has decided do not change The monetary policy interest rate is 118%.

In this way, the annual effective interest rate (TEA) is maintained. 209% .

“In August, Monthly inflation rate was 12.4% “This was caused by the transfer to prices of the highest financial volatility recorded in the second half of the month and the readjustment of the level of the official exchange rate,” the monetary authority said in a statement.

“However, high-frequency indicators reflect that the rate of increase in the general price level has slowed since its peak in the third week of August, and the rate of increase in the general price level has slowed since the beginning of September. It should have been,” he said.

Similarly, he said, “The central bank’s interest rate policy positive real return To maintain currency and exchange stability, investments in local currencies are prohibited. ”

The last time the monetary authorities raised interest rates was August 14th , after the primaries and a 22% devaluation of the official exchange rate. At the time, interest rates on fixed deposits paid by banks were increased by 21 percentage points.

unstoppable inflation

Argentina’s inflation rate reached 124.8% in August, a figure not seen since. February 1991 two months before Argentina adopted a “convertibility” system between the peso and the US dollar after the hyperinflation of 1989-1990.

According to the official report, there was a positive change of 13.7% in goods last month compared to July, while services increased by 9.1%, corresponding to data of 125.5% and 120.8% respectively in the annual comparison.

Among all the increases this month, increases in food and non-alcoholic beverages (15.6%), health (15.3%), and home equipment and maintenance (14.1%) stand out.

Finally, in the first eight months of this year, inflation increased by a cumulative 80.2%.

Source: Biobiochile

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