After a run against the peso and a yearly inflation that well surpassed 100%, the Central Bank’s board raised the benchmark interest rate by 1000 basis points today. The measure means that the yearly nominal rate for 28-day Liquidity Bills —the rate the Central Bank lends money to financial entities— is now 91%, whereas the effective interest rate is 141%. By raising the interest rate, the Central Bank is attempting to make investments in Argentine pesos more attractive and discourage buying dollars. For the rest of the private sector’s fixed-term deposits, the minimum nominal interest rate is 85.5%, meaning that the effective rate is 128.5%. The last time the Central Bank had raised interest rates was last week, when it did so by 300 basis points, from a yearly 78% nominal rate to 81%.

Source: Bueno Aires Herald April 28, 2023 02:45 UTC