In­ter­est rates hit 60% af­ter peso plum­mets in value

The Guardian Weekly - - World Round Up -

Ar­gentina hiked in­ter­est rates to 60% as it took dra­matic steps to re­store con­fi­dence in its plung­ing cur­rency, in the lat­est sign of tur­moil among emerg­ing market economies this year.

The Ar­gen­tinian cen­tral bank raised the cost of bor­row­ing by 15 per­cent­age points last week in an at­tempt to shore up the peso, which has plum­meted in value. The cen­tral bank said it would keep rates un­changed at 60% un­til at least De­cem­ber.

Hav­ing ap­proached the IMF for emer­gency sup­port of $50bn amid an un­fold­ing eco­nomic cri­sis, Ar­gentina asked the Wash­ing­ton-based lender of last re­sort to ac­cel­er­ate the re­lease of the money to bol­ster its fi­nances. Ar­gentina’s pres­i­dent, Mauri­cio Macri, has said a lack of trust from the mar­kets had forced him to ask for help as the peso weakens and in­fla­tion runs at 30%.

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