Argentina's central bank is set to leave its interest rate unchanged at 118% at the directors meeting scheduled for later Thursday, an official source at the bank said, Reuters reported. Argentina is struggling to tamp down on triple-digit inflation as presidential elections loom just several weeks away. The central bank held the rate at 118% last month after raising it from 97% in the aftermath of a shock primary election which saw radical libertarian Javier Milei become the favorite to win the presidency this month. Annual inflation is running at 124%.
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A public spending boom and generous tax cuts carried out by Argentina’s Economy Minister Sergio Massa, who’s also running for president in the October election, pose new setbacks to the country’s $44 billion program with the International Monetary Fund, according to the Washington-based lender, Bloomberg News reported. “The recently adopted policy measures and announcements add to Argentina’s challenges,” IMF chief spokesperson Julie Kozack said at a press conference in Washington Thursday.
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Burford Capital said it would be seeking court permission to begin attaching Argentine assets within weeks to satisfy a $16 billion judgment, saying it was clear that the South American nation had “no intention” of paying, Bloomberg News reported. In a letter Friday to US District Judge Loretta Preska in New York, London-based Burford said it intended to ask her to set Oct. 16 as the date it can begin efforts to execute the judgment and attach assets. Preska earlier this month ordered Argentina to pay the award over its 2012 expropriation of foreign investment in oil company YPF SA.
Argentina's economy shrank 4.9% in the second-quarter of 2023 versus the year-ago period, the country's statistics agency said on Tuesday, slightly missing analysts' forecast of a 4.8% contraction and posting the first break in growth for years, Reuters reported. Tuesday's result marks the first time the country's growth was in the red since 2020. The agricultural sector registered the highest drop, with a 40.2% decrease compared to the same period the previous year.
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Diego Labat, Uruguay's central bank chief, is sitting pretty. Inflation is at the lowest level in nearly two decades, the currency is one of the region's strongest, and the country is leading a regional pivot towards interest rate easing, Reuters reported. That's a sharp contrast to just across the Rio de La Plata estuary in Buenos Aires, where inflation hit 124% in August, the highest since 1991, capital controls are barely holding back a fall in the currency, and net reserve levels are in the red.
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Argentina's central bank (BCRA) board members decided to hold the benchmark interest rate steady at 118% at a meeting on Thursday, a source familiar with the matter said, despite the country's inflation rate hitting an over 30-year high in August, Reuters reported. August inflation data published on Wednesday showed annual inflation running at over 124%, with the monthly rate at 12.4%, its highest level since 1991, deepening a cost-of-living crisis ahead of the presidential elections scheduled for October.
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Argentina's annual inflation rate shot up to 124.4% in August after a sharp devaluation of the peso currency, with a 12.4% rise in the month the fastest since 1991, which is driving a painful cost-of-living crisis in the South American country, Reuters reported. The soaring prices, which rose more than expected, are forcing hard-hit shoppers to run a daily gauntlet to find deals and cheaper options as price hikes leave big differences from one shop to the next, with scattered discounts to lure shoppers.
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Argentina suffered a big legal defeat on Friday as a U.S. judge ruled that the country must pay about $16 billion to minority shareholders of YPF arising from the government’s 2012 seizure of a majority stake in the oil and gas company, Reuters reported. U.S. District Judge Loretta Preska in Manhattan ruled in favor of Burford Capital, which funded the litigation brought by shareholders Petersen Energia Inversora and Eton Park Capital Management LP, and according to court papers was entitled to a respective 70% and 75% of their damages.
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Argentina’s central bank expects monthly inflation in August to have accelerated to almost double the pace of July after the government devalued the peso, two officials said in another sign the economy is quickly deteriorating, Bloomberg News reported. The central bank estimates consumer prices will increase at least 10.6% from July, the fastest monthly rate since Argentina was coming out of hyperinflation more than three decades ago, the officials said, asking not to be named citing preliminary internal high frequency data and private online researchers like PriceStats.
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The International Monetary Fund’s executive board approved a $7.5 billion disbursement to Argentina on Wednesday, extending a financial lifeline to the cash-strapped government ahead of a tight presidential race, Bloomberg News reported. The cash payments are part of a refinanced $44 billion program, the lender’s largest, that endured months of negotiations amid political uncertainty and wrangling over economic policy.
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