May 20, 2022
Argentinian Central Bank

Directors of Argentina’s central bank are set to consider a possible interest rate hike, as the country battles to contain surging inflation which is expected to be over 6% for March.

A central bank spokesman confirmed a meeting was planned for Wednesday, a day earlier than usual due to Thursday being a national holiday in the South American country.

Inflation for March will be announced at the same time, and is expected to top 6%. The source described the projected figure as “readjusting reality” and said that an increase in the interest rate would be considered in response to the news.

“March inflation readjusts reality and therefore a potential rate hike will be analyzed,” said the source, adding that “There is an implicit consensus that it should be raised, what is not known is the convenient range so as not to harm the running of the economy”.

The expected increase would be the fourth rate hike of 2022 so far, with the central bank having already raised the benchmark 28-day Leliq rate to 40% in January, 42.5% in February and 44.5% in March. Countries across Latin America are struggling with rising inflation and Argentina is one of the worst hit, with predictions that the rate will come close to 60% by the end of the year.

Argentina had recently promised to increase interest rates as part of a $44bn package agreed with the IMF.