By Jorge Otaola
BUENOS AIRES (Reuters) -Argentina’s central bank is set to hold the benchmark interest rate steady at 75% after months of consecutive hikes, two sources said, with the entity’s directors hopeful that monthly inflation will gradually slow down in the remainder of the year.
The bank had been mulling another potential hike after successive raises each month this year to counter inflation that is set to end 2022 at over 100%, a rise in prices that is hurting ordinary Argentines, hitting savings and economic growth.
However, the directors were unable to reach a unanimous decision over a new hike, one source, an adviser to the bank, told Reuters, asking not to be named as the discussions were private.
“There was no consensus (among the board) to increase the rate because it is certain that inflation will go down in the coming months,” the source said.
A second source with direct knowledge of discussions said the benchmark rate would for now remain unchanged.
The adviser said at least two directors had been opposed to a new hike. The bank has six directors who make key decisions, along with the president and two vice presidents. Normally decisions are made by consensus.
“Neither today nor yesterday is the rate issue on the agenda,” a central bank spokesman said, adding that money policy decisions were voted on by the entire board. “The tradition is that everything comes out by consensus.”
The directors are hopeful that rises in the monthly consumer price index (CPI) will slow in the remaining months of the year, the adviser said. There were concerns more hikes to the benchmark Leliq rate would feed a “quasi-fiscal deficit” and make credit even more expensive, hurting growth.
Argentina’s official INDEC statistics agency is set to release September inflation data later on Friday. A Reuters poll of analysts estimated the monthly rate would come in at around 6.7%, down from a July peak of 7.4% and 7% in August.
A central bank analyst poll forecasts that monthly inflation will dip towards around 6% in the months ahead.
(Reporting by Jorge Otaola; Writing by Adam Jourdan; Editing by Nick Zieminski and Jonathan Oatis)