BUENOS AIRES (Reuters) - Argentina’s central bank held its benchmark rate ARSMPR=BCRA at 27.25 percent on Tuesday, the monetary authority said in a statement, adding that a further depreciation in the peso currency could disrupt its anti-inflation efforts.
The central bank reiterated that February inflation, expected to be published by government statistics agency Indec on Wednesday, would be higher than January’s 1.8 percent spike in consumer prices, but said inflation would trend down later in the year as increases to regulated prices slow down.
“The central bank considers this acceleration in prices to be temporary,” the monetary authority wrote in a statement. President Mauricio Macri’s government has been reducing subsidies for utilities consumption to lower the fiscal deficit, but those cuts cause increases in consumers’ bills.
In its statement, the bank justified its interventions in the spot currency market since last week by noting that "a depreciation greater than that already occurred would not be justified." The central bank has sold more than $500 million since March 5 as the peso ARS=RASL hit record lows.
“If (further devaluation) is not avoided, it would have the potential to delay the disinflation process,” the monetary authority wrote.
Reporting by Luc Cohen; Editing by James Dalgleish