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Argentina raises its key interest rate to 47 % as inflation reaches a 20-year high.

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Argentina’s central bank raised interest rates for the fourth time this year, following inflation data earlier in the day that showed prices rising at the fastest monthly rate in 20 years.

According to a statement issued Wednesday evening, the monetary authority raised its benchmark Leliq rate by 250 basis points to 47 percent. The rate increase also raises the effective annual rate, which takes into account compounded interest, to 58.7 percent, which is higher than the current annual inflation rate of 55.1 percent.

The central bank raised interest rates after the statistics agency released data showing that prices rose 6.7 percent in March, the fastest monthly rate since 2002.

The increase in international food and energy prices as a result of Russia’s invasion of Ukraine, combined with local factors such as a fuel price increase and a faster rate of depreciation for the official peso, contributed to March’s higher inflation.

Argentina is also raising rates to comply with a $44 billion International Monetary Fund agreement that requires the government to keep interest rates above inflation, as measured by the effective annual rate.

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Kathy Lewis

Kathy Lewis is an all-around geek who loves learning new stuff every day. With a background in computer science and a passion for writing, she loves writing for almost all the sections of Editorials99.

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