By Jorge Otaola
BUENOS AIRES (Reuters) – Argentina’s central bank cut its benchmark interest rate by 10 points to 70%, the monetary authority said on Thursday, the third adjustment since libertarian President Javier Milei took office in December and targeted tamping down rampant inflation.
The move, from the previous level of 80%, confirms a Reuters report earlier this week saying that a rate cut was imminent, and underscores government confidence over bringing down inflation that’s running on an annual basis at over 275%.
“After the initial correction of relative prices in December 2023, we’re seeing a pronounced slowdown in inflation, despite the strong statistical drag that inflation carries in its monthly averages,” the central bank said in a statement.
The bank added that since Milei took office the monetary base had been reduced substantially, which helps to mop up liquidity and tamp down prices rises.
The country is set to reveal March inflation data on Friday, which analysts peg at 12% for the month and the government has said should be close to 10%. That’s down from a peak of over 25% in December following a sharp currency devaluation by Milei.
Milei’s tight fiscal policies have boosted the mood of investors in Argentina, propelling shares and bonds, although poverty levels are increasing along with an economic recession, as activity, production and consumption slide.
(Reporting by Jorge Otaola; Editing by David Alire Garcia)
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