By Jorge Otaola
BUENOS AIRES (Reuters) – Argentina’s central bank board of directors is split over a potential interest rate hike this month, meaning that the entity will likely leave the benchmark rate unchanged at 75%, a source said, hopeful that monthly inflation will gradually slow down.
The entity had been mulling another potential hike after successive raises this year to counter inflation that is set to end 2022 at over 100%, a rise that is hurting regular Argentines, hitting savings and economic growth.
However, the directors were unable to reach a unanimous decision over a new hike, the source, an adviser to the bank, told Reuters. This means that the rate would likely remain unchanged in October, the person added, asking not to be named as the discussions were private.
“There was no unanimity (among the board) to increase the rate because it is certain that inflation will go down in the coming months,” the source said.
The adviser said that at least two directors were opposed to a new hike. The bank has six directors who make key decisions along with the president and two vice presidents. Normally decisions are made by consensus.
“Neither today nor yesterday is the rate issue on the agenda,” a central bank spokesman said, adding that money policy decisions were voted on by the entire board. “The tradition is that everything comes out by consensus.”
The directors are hopeful that rises in the monthly consumer price index (CPI) will slow down in the remaining months of the year, the person said. There were concerns more hikes to the benchmark Leliq rate would feed a “quasi fiscal deficit” and make credit even more expensive, hurting growth.
Argentina’s official INDEC statistics agency is set to release September inflation data later on Friday. A Reuters poll of analysts estimated the monthly rate would come in at around 6.7%, down from a July peak of 7.4% and 7% in August.
(Reporting by Jorge Otaola; Writing by Adam Jourdan; Editing by Nick Zieminski)
