Argentina’s central bank raised the interest rate it charges banks to 28.75% from 27.25% on Tuesday, as inflation expectations rise, the monetary authority said in a statement.
It was the bank’s second consecutive hike after a long period of holding the rate steady.
Inflation expectations for 2017 rose to 23%, up from 22% the prior month, according to the bank’s monthly poll of economists published last Thursday. September data put Argentina’s inflation at 1.9%, higher than previous months. The country’s cumulative inflation rate is 17.6% for the first nine months of the year, above the 12% to 17% target range for 2017.
The central bank said in a statement that high frequency indicators show a lower level of inflation since October, however. “The monetary authority will seek to accentuate the inflationary decline and minimize the impact of the next regulated price increases,” the bank said.
The Argentina estimates buck a downward trend of inflation in Latin America. Among the latest 2017 year-to-date numbers, only Venezuela and Argentina are in double-digits. Venezuela has the highest rate in the world, at 722%
Ecuador leads all countries in the region with a negative inflation rate of .09%. In fact, the country, which uses the U.S. dollar as its currency, has the lowest rate in the entire western hemisphere.
Other leaders for low inflation are Panama at .5%, Chile at 1.9%, Peru at 2.04% and Costa Rica at 2.33%.
Colombia has made major progress, reducing last year’s rate of 7.5% to 4.05% while Mexico continues to struggle at 6.37 year-to date.
Source: World Bank