The Central Bank of the Argentine Republic (BCRA) raised its 28-day benchmark interest rate by 950 basis points on Aug. 11, pushing up the rate to 69.5 percent.
“The rise in the policy rate will help reduce inflation expectations for the rest of the year and consolidate the financial and exchange rate stability achieved after the disruptive events of the last two months that led to the intervention of the BCRA in the secondary securities market,” the central bank said in an Aug. 11 press release.
This is the eighth policy rate hike implemented by the BCRA this year and follows the 800-basis point hike announced two weeks back. The hikes come as the country’s inflation rose by 7.4 percent in July, pushing up the annual inflation to a two-decade high of 71 percent.
The inflation crisis resulted in the resignation of the country’s finance minister Martin Guzman in July. His replacement Silvina Batakis, who assumed Guzman’s post on July 4, was then ousted a month later on Aug. 3.
The latest finance minister, Sergio Massa, has announced plans to provide customs and tax benefits to oil companies. Massa wants to boost investments in the Vaca Muerta shale formation, cutting red tape to smooth the process.
He has also promised not to ask the central bank to print more money in 2022 to fund government spending, which has been an important factor in pushing up inflation.
The increase in the monetary policy rate will “accelerate the normalization process of the structure of active and passive interest rates of the economy to bring them closer to a positive terrain in real terms,” the bank said.
A positive real interest rate is one of the key points of agreement that Argentina made with the International Monetary Fund in a recent debt deal worth $45 billion.
Socialist Government Policies
Inflation is one of many challenges facing Argentina’s economy. The government’s socialist policies add to inflation and worsen the country’s debt situation, with almost 22 million Argentinians dependent on some form of government assistance.
People have also been calling for more relief. On Aug. 4, citizens protested outside government offices, holding signs with slogans like “social equality” and “public policies for everyone.”
On Aug. 7, socialist unions shut down the widest avenue of the capital city Buenos Aires for six hours to show support for Vice President Cristina Kirchner, a strong proponent of social benefits programs.
At present, Argentina spends around 800 million pesos (around $6 million) per day on state benefit programs. In the first quarter of 2022, the unemployment rate was 43 percent.
In an interview with The Epoch Times, Harry Lorenzo, chief financial officer of Income Based Research, blamed the spending habits of the government for the nation’s problems.
“The Argentine government has been grappling with a collapsing economy for some time now. The main reason for this is the government’s unsustainable spending, which has been funded in part by generous welfare programs,” Lorenzo said.
Autumn Spredemann contributed to the report.
Follow
Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.
Argentina Central Bank Hikes Rates to Whopping 69.5 Percent as Country Fights Soaring Inflation & Latest News Update
Argentina Central Bank Hikes Rates to Whopping 69.5 Percent as Country Fights Soaring Inflation & More Live News
All this news that I have made and shared for you people, you will like it very much and in it we keep bringing topics for you people like every time so that you keep getting news information like trending topics and you It is our goal to be able to get
all kinds of news without going through us so that we can reach you the latest and best news for free so that you can move ahead further by getting the information of that news together with you. Later on, we will continue
to give information about more today world news update types of latest news through posts on our website so that you always keep moving forward in that news and whatever kind of information will be there, it will definitely be conveyed to you people.
Argentina Central Bank Hikes Rates to Whopping 69.5 Percent as Country Fights Soaring Inflation & More News Today
All this news that I have brought up to you or will be the most different and best news that you people are not going to get anywhere, along with the information Trending News, Breaking News, Health News, Science News, Sports News, Entertainment News, Technology News, Business News, World News of this made available to all of you so that you are always connected with the news, stay ahead in the matter and keep getting today news all types of news for free till today so that you can get the news by getting it. Always take two steps forward
Credit Goes To News Website – This Original Content Owner News Website . This Is Not My Content So If You Want To Read Original Content You Can Follow Below Links