Argentina's Extraordinary Rate Hike Could Be Just the Beginning
- Policy makers demonstrating commitment to support the peso
- Action marks a reversal from earlier in 2018, when rates fell
This article is for subscribers only.
Argentina investors say the central bank’s extraordinary effort to bolster the peso Friday may be just the beginning, with more such actions to be expected if the currency doesn’t stabilize soon.
Policy makers’ decision to raise the key interest rate 3 percentage points to 30.25 percent Friday, a surprise move announced just days after they held borrowing costs, led the peso to erase losses for the day. Should the currency resume the sharp selloff it saw in recent days, the central bank is likely to hike again, according to strategists at TCW Group and Barclays Plc.