2023-05-15 06:15:30 ET
In an attempt to curb surging inflation and support the peso ( ARS:USD ), Argentina's government is likely to announce a rate hike of 600 basis points on Monday, bringing its benchmark rate to 97%. The list also includes interventions in the foreign exchange market, as well as other emergency measures
Inflation in the country already hit 109% on an annual basis in April and the peso ( ARS:USD ) has lost about 35% against the dollar so far this year. Tumbling confidence and dwindling foreign currency reserves are threatening the government's finances, and while the IMF has asked Argentina to hike rates, it has urged the government to hold off on spending its dollars reserves.
The deteriorating economic situation comes ahead of presidential election slated for October. Policymakers are eager to patch the economy before then, but following previous failed efforts, the latest measures may just kick the can further down the road.
ETFs: NYSEARCA: ARGT
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Brazil and Argentina discuss common currency for Latin America
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Argentina to hike rates by 600 bps to stave off inflation