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UPDATE 2-Argentina central bank raises reverse repo rates, holds benchmark steady

(Adds confirmation from bank official, market filing)

BUENOS AIRES, Oct 29 (Reuters) - Argentina’s central bank raised its reverse repo rates on Thursday while holding the benchmark Leliq rate unchanged, a market filing from the bank, seen by Reuters and confirmed by a bank official, showed.

The change, part of a wider rate harmonization push, raised the overnight reverse repo rate to 31% from 30% previously, while the seven-day reverse repo rate was increased to 34.5% from the previous level of 33%.

Reuters reported the adjustments earlier on Thursday citing a source with direct knowledge of the move.

The benchmark Leliq interest rate was left steady at 36% after a source with knowledge of the plan had earlier said the key rate “for now would remain unchanged”.

Argentina is battling economic crises on various fronts, with an expected 12% contraction in its economy this year, plus dwindling foreign reserves and capital controls creating a wide gap between the official peso rate and trades in alternative markets.

The central bank has been looking to bolster confidence in the peso and encourage more saving in the currency.

Argentina’s central bank, which holds its weekly directors meeting on Thursday, had in mid-October previously lowered the benchmark Leliq rate to 36% and raised the overnight reverse repo rate to 30%. (Reporting by Jorge Otaola; Writing by Adam Jourdan. Editing by Jane Merriman)

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