May 16, (THEWILL) – The Central Bank of Argentina has raised its key interest rate by six percentage points to 97% in an effort to tackle soaring inflation in the country.
Argentina’s annual inflation rate soared above 100% last month, the highest level since the early 1990s.
The apex bank, in a statement on Monday, said it expected the rate hike will incentivize investments in the country’s currency.
However, analysts said the new rate hike is unlikely to bring any real change to Argentinian markets.
“The feeling is that the Government is completely losing it against inflation. I fear the Government has started to act very late: interest rate hikes are of course the main strategy to combat inflation but they take time
“When a Central Bank raises the interest rate, the effects are felt some two or three months afterwards, and that timescale is not effective in Argentina’s situation,” said Miguel Kiguel, a financial adviser and former Deputy Manager at the Central Bank of Argentina.
