(Bloomberg) — Argentina’s central bank raised interest rates for the fourth time this year after inflation data published earlier in the day showed prices increasing at the fastest monthly pace in 20 years.
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The monetary authority increased its benchmark Leliq rate by 250 basis points to 47%, according to a statement distributed Wednesday evening. The rate hike also boosts the effective annual rate, which accounts for compounded interest, to 58.7%, putting it above current annual inflation of 55.1%.
Read More: Argentina Inflation Surged to 20-Year High In March (1)
Central bank officials raised rates after the statistics agency published data showing prices rose 6.7% in March, the fastest monthly pace since 2002.
The surge of international food and energy prices as a result of Russia’s invasion of Ukraine combined with local factors, such as a fuel price increase and an accelerated pace of devaluation for the official peso, led to the more robust inflation in March.
Argentina is also raising rates to comply with its $44 billion International Monetary Fund agreement, which calls for the government to keep interest rates, measured by the effective annual rate, above inflation.
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