Argentina central bank cuts reference rate for 8th straight week

BUENOS AIRES, Sept 20 (Reuters) - Argentina’s central bank cut its 35-day reference rate by 50 basis points for the eighth week in a row on Tuesday, as inflation slows and policymakers try to revive the local economy.

The bank cut the rate to 26.75 percent, according to a statement from the bank. A lower reference rate can stimulate growth by helping push cash into the economy but can also be inflationary.

“High frequency indicators monitored by the central bank show a mixed performance which does not at the moment alter the monetary authority’s disinflation forecast,” the central bank said in a statement.

Finance Minister Alfonso Prat-Gay said on Monday that Argentina would likely post non-negative growth in the third quarter for the first time in five quarters. He said annual inflation could end the quarter at 17 percent, the government’s target for all of 2017.

Inflation slowed drastically in greater Buenos Aires in August, to 0.2 percent from 2.0 percent in July, in part because the Supreme Court forced the government to restore home heating gas subsidies until public hearings could be held, keeping prices low for consumers.

“The central bank will continue to maintain a clear anti-inflationary bias to ensure that the disinflation process continues toward its target for this year of a monthly inflation of 1.5 percent or less in the last quarter,” the statement said. (Reporting By Caroline Stauffer; Editing by Sandra Maler)