The Banco Central de la Republica Argentina (BCRA) raised interest rates by 100 basis points to 28.75 percent. The BCRA has raised interest rates by 400 basis points so far in 2017.
The BCRA expects inflation to fall as it enacts tighter monetary policy. “The BCRA expects that, with this increase in the contractionary bias of monetary policy, the downward trend in core inflation will consolidate more rapidly in the coming months, in order to converge to the inflation target of 10% ± 2% by 2018,” the BCRA said in a press release.
Expected inflation for 2017 and 2018 continued to rise as well. The BCRA forecasts that inflation will be 23 percent in 2017 and 16 percent in 2018. In May, the expected inflation rates for 2017 and 2018 were 21.4 and 14.5 percent, respectively.