Argentina’s monthly inflation climbed less than expected as a crucial vote in Buenos Aires Province had stirred up currency volatility.
Consumer prices rose 1.9 percent in August from July, just below the two percent median estimate of economists surveyed by Bloomberg, matching July’s print. Annual inflation slowed to 33.6 percent, according to government data published Wednesday.
Volatility last month before the vote, which the libertarian’s party lost to his leftist Peronist rivals by nearly 14 percentage points, led the government to eventually intervene in Argentina’s currency market.
Congress also overturned some of Milei’s vetoes on spending bills in August, reflecting his dwindling support in the legislature.
After Sunday’s vote, the currency weakened further, nearing the upper limit of a range where the peso freely floats as part of a US$20-billion agreement with the International Monetary Fund.
Milei still has six weeks before much bigger midterm elections on October 26, when Argentines will renew nearly half the seats in Congress.
To prevent currency volatility in August, Argentina’s monetary authority tightened policy restrictions for banks, including the percentage of deposits they need to park at the Central Bank and validated record-high interest rates in multiple Treasury auctions.
Argentina is expected to finish the year with 28 percent annual inflation this year, according to an August Central Bank survey of economists. Growth is expected at 4.4 percent.
by Manuela Tobias, Bloomberg
Comments