Argentina's Economic Shift: Central Bank Poised for Rate Cut Amid Inflation Slowdown
Argentina's central bank is expected to reduce its key interest rate as inflation cools and the pace of peso devaluation slows. The benchmark rate, currently 32%, may see a 400 basis point cut. President Milei's policies have driven down inflation, prompting market optimism.
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The financial sector in Argentina is abuzz with anticipation as the central bank prepares to potentially lower its benchmark interest rate from its current 32%. The decision comes amid a significant decrease in inflation rates and a strategic slowdown in the devaluation of the peso.
This monetary policy shift, expected to be announced on Thursday, aligns with efforts by President Javier Milei's administration to stabilize Argentina's economic landscape. Milei has effectively reduced inflation from alarming monthly surges to more manageable levels, triggering market optimism and stirring an upswing in peso investments.
However, financial analysts suggest that the central bank might not fully meet the necessary rate cut to maintain the desired spread with the crawling peg. Despite these uncertainties, the market's confidence remains buoyed by the anticipated adjustments and continued economic vigilance.
(With inputs from agencies.)