Markets News

Argentine cenbank says cuts benchmark interest rate to 58% from 63%

BUENOS AIRES, Dec 19 (Reuters) - The Central Bank of Argentina on Thursday cut its benchmark interest rate to 58% from 63%, part of the new center-left government’s effort to reactivate the stagnant economy.

“The reference interest rate was at an inappropriate level and potentially inconsistent with the prospects of nominal evolution of the relevant economic variables,” the bank said in a statement announcing the rate cut.

Argentina, Latin America’s No. 3 economy, is suffering from low investment, flat-line growth, high inflation and rising poverty levels.

President Alberto Fernandez, inaugurated last week, has vowed to lower borrowing costs while moderating the previous government’s unpopular fiscal tightening effort.

He has sent a sweeping economic reform bill to Congress aimed at undoing many of previous President Mauricio Macri’s orthodox policies. The bill was being debated in the lower House of Congress on Thursday and set to go to the Senate for final approval if passed. (Reporting by Nicolas Misculin; Writing by Hugh Bronstein; Editing by Sandra Maler)