March 5, 2020 / 9:43 PM / a month ago

Argentina cuts interest rate for eighth time since December

BUENOS AIRES (Reuters) - Argentina’s central bank lowered the benchmark interest rate to 38% from 40% on Thursday, the eighth cut since the middle of December when the country’s new Peronist government came to power pledging to rekindle stalled growth.

The bank said the cut was based on signs of slowdown in inflation and aimed to help revive the economy, vital as the country looks to avoid defaulting on its debts.

Argentina’s Peronist government, which took office on Dec. 10, has slashed interest rates in a bid to rev up Latin America’s third largest economy, which President Alberto Fernandez said is needed to be able to pay off its creditors.

“The decision was made based on signs that the disinflation process is consolidating and with a view to create conditions that favor the recovery of economic activity,” the central bank said in its statement.

The bank added that while there had been some positive signals in the economy, there was still no “concrete evidence of that it had exited from the recessive phase”.

The change will go into effect from Mar. 10, the next date for central bank auctions of short-term Leliq notes, the mechanism for setting the benchmark rate.

(GRAPHIC: Argentina guides rates back to earth - here)

Reporting by Hernan Nessi; Writing by Adam Jourdan; Editing by David Gregorio

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