By Jorge Otaola
BUENOS AIRES (Reuters) – Argentina’s central bank is set to hold the country’s benchmark interest rate steady for a second consecutive month, a source close to the bank and analysts said, despite inflation remaining high and recent pressure on the peso currency.
The South American country, grappling with inflation set to hit 100% this year, paused what had been one of the world’s most aggressive tightening cycles last month, keen not to hinder growth and on expectations inflation would start to cool.
Monthly inflation has been starting to ease since a peak in July, though it remains above 6% on a month-on-month basis. Analysts polled by Reuters expect October inflation to come in at 6.5%, slightly higher than the 6.2% recorded in September.
“The (consumer price) index for October will be high, but core inflation continues to give a very slight monthly drop during the next semester, that is why the general idea is to maintain the rate at 75%,” a central bank adviser told Reuters.
A central bank spokesman declined to comment
Two other private analysts consulted by Reuters said the benchmark Leliq rate would likely be held stable. The rate had been hiked each month from the start of the year from 38% to the most recent hike in September to its current 75% level.
The country’s official statistics agency will release inflation data for October next Tuesday. The central bank board normally meets each Thursday to make monetary policy decisions, though these can also be announced on other days.
GRAPHIC – Argentina: inflation spirals https://graphics.reuters.com/ARGENTINA-ECONOMY/zgpomndbrpd/chart.png
(Reporting by Jorge Otaola; editing by Jonathan Oatis)
