Argentina's central bank jacked up its key interest rate by 15 points to 60%.

Officials promised to leave the rate at least that high until December as the country seeks a way to stop the collapse of the Argentine peso.

The currency has fallen by almost 50% against the US dollar in the last year.

It was down as much as 10% versus the dollar in trading early Thursday, taking it to yet another record low of 39 pesos to the dollar.

Argentina asked the International Monetary Fund to speed up the disbursement of a $50 billion lifeline it arranged earlier this year.

IMF Managing Director Christine Lagarde said in a statement that she had instructed her staff to "reexamine the phasing of the financial program."

The IMF stepped in to help Argentina in June after the peso weakened dramatically.

Argentina's problems are similar to problems with several other emerging market currencies, including the Turkish lira.</s>
• The Central Bank of Argentina raised its benchmark interest rate to 60%.
• On Wednesday, Argentine President Mauricio Macri said he has asked the International Monetary Fund to speed up bailout payments to the country.
• Watch the Argentine peso in real time here.

Argentina's central bank hiked rates by 15 percentage points to 60% on Thursday after the peso continued to slide despite the country already having the highest borrowing rates in the world.

The Central Bank of Argentina raised its benchmark interest rate up from 45% after the peso slid more than 8% to fresh lows. It is the worst-performing emerging market currency of 2018.

The rate hike comes as the International Monetary Fund, which has extended Argentina the largest credit line in its history, considers speeding up bailout payments to the country. Argentine President Mauricio Macri said on Wednesday he had requested IMF do so in order to "eliminate any uncertainty that was created before the worsening of the international outlook."

As part of the three-year standby agreement, the government has received $15 billion so far and was poised to get an additional $3 billion next month.

Citing a ballooning debt burden and a weakening peso, the rating agency Moody's on Tuesday cut its growth forecast for Argentina. It estimates gross domestic product will contract by 1% next year, compared with previous expectations for a 3% expansion.</s>Argentina Hikes Interest Rate To 60 Percent In Bid To Halt Currency's Fall

When Argentine President Mauricio Macri told the country he had asked the International Monetary Fund to speed its disbursement of a $50 billion loan, he consciously aimed to assuage the fears of uneasy market watchers.

"We have seen new expressions of a lack of confidence in the markets, specifically over our financing capacity in 2019," Macri said in a speech posted to Facebook Wednesday, adding: "This decision aims to eliminate any uncertainty."

By Thursday, however, the move appeared to have had just the opposite effect — and Argentine authorities were scrambling to mitigate it.

Argentina's currency, the peso, followed a rough day of trading with a still more dreadful drop when markets opened again Thursday morning. It plummeted 15 percent within minutes and spent the rest of the day hovering at record lows. At one point, a single dollar could buy more than 41 Argentine pesos.

The country's central bank acted quickly in response, raising its benchmark lending rate 15 points, to 60 percent — the highest such rate in the world, according to The Associated Press. The drastic measure intended to bolster the currency's sagging value — and ease fears of a negative trend that has also seen a worrisome inflation rate.

The currency has lost nearly 50 percent of its value since the year began.

The IMF, for its part, has said it's amenable to adjusting the timeline of its loan to Argentina, which was agreed to in May. The managing director of the international banking system, Christine Lagarde, said Wednesday that revisions were warranted in light of "the more adverse international market conditions, which had not been fully anticipated in the original program."

Those inclement conditions are rooted partly on what's going on in the city where the IMF is based, Washington, D.C. It's there that the U.S. banking system, the Federal Reserve, has responded to a strong American economy with a couple of small increases to its own key interest rate in recent months.

"Because the U.S. economy is strengthening, that is having a ripple effect in emerging markets around the world. Many of these countries have borrowed a fair bit in international markets and especially done a lot of this borrowing in dollars when dollar borrowing was cheap," global economist Eswar Prasad of Cornell University told NPR's All Things Considered earlier this month.

"Now," he added, "the chickens are coming home to roost when interest rates in the U.S. are rising, and it's putting pressure on emerging markets around the world."

That includes Argentina — but it is by no means limited to the Latin American country. Currencies in Turkey, South Africa and Indonesia have all suffered to varying extents as the dollar grows stronger and attracts more international investment away from these emerging markets, Prasad says.

Within Argentina, the IMF's support does not necessarily come as welcome news. Many Argentines still blame their country's economic collapse nearly two decades ago on reforms pushed by the international organization. As the BBC observes, "going to the IMF is the most unpopular move a president could make in Argentina."

Lagarde, however, anticipates a far brighter outcome this time around.

"I am confident that the strong commitment and determination of the Argentine authorities will be critical in steering Argentina through the current difficult circumstances," the IMF director said, "and will ultimately strengthen the economy for the benefit of all Argentines."</s>Argentina's Central Bank has increased its benchmark interest rate to 60 percent in efforts to halt a sharp slide in the value of the peso.

The sliding value of the currency prompted Argentina to seek a financing deal earlier this year with the International Monetary Fund and President Mauricio Macri now is asking for an early release of those funds.

The peso slipped about 7 percent against the dollar Wednesday and was down another 5 percent early Thursday. It's been trading at 35.9 to the dollar.

The Central Bank said Friday that it was hiking its benchmark interest rate in response to the current currency scenario and the risk of greater impact on local inflation. The rate was set to 45 percent earlier this month.</s>BUENOS AIRES, Argentina — Argentina's Central Bank on Thursday increased its benchmark interest rate to 60 percent — the world's highest — in an effort to halt a sharp slide in the value of the peso, which plunged to a new record low.

The peso has tumbled more than 50 percent so far this year, prompting Argentina to seek a $50 billion financing deal with the International Monetary Fund.

But President Mauricio Macri has struggled to calm markets and bring confidence to Argentines who continue to lose purchasing power to one of the world's highest inflation rates. Macri said Wednesday that he is now is asking for an early release of the IMF funds.

The peso slipped about 7 percent against the dollar Wednesday and was down another 15 percent by midday Thursday, when it was trading at 39.6 to the dollar.

The Central Bank said in a statement that it was hiking its benchmark interest rate in response to the current currency scenario and the risk of greater impact on local inflation. The rate had been set to 45 percent earlier this month.</s>BUENOS AIRES, Argentina — Argentina’s Central Bank on Thursday increased its benchmark interest rate to 60% — the world’s highest — in an effort to halt a sharp slide in the value of the peso, which plunged to a record low.

The peso fell more than 13% against the dollar on Thursday, closing at an all-time low of 39.2 per greenback, after slipping about 7% the day before.

The Central Bank said in a statement that it was hiking its benchmark interest rate by 15 percentage points to 60% in response to the currency problems and the risk of greater impact on local inflation, which is already running at about 30% a year.

The tumult in the exchange market came a day after President Mauricio Macri said he was asking for an early release of some IMF funds under an US$50 billion backup financing arrangement approved earlier.

Some experts said the announcement, combined with the interest rate hike, had the unintended effect of fuelling the crisis of confidence.

“I think today’s interest hike announcement will do nothing but leave investors even more jittery,” said Monica de Bolle, senior fellow at the Peterson Institute for International Economics.

“I’m finding it difficult to understand why, after yesterday’s announcement about front-loading more of the IMF funding, the government thought the hike was warranted. Hyperactivity starts to look like desperation.”

Macri has struggled to calm markets and bring confidence to Argentines who continue to lose purchasing power. Many are frustrated with layoffs, higher utility rates and a rise in poverty levels.

Many also have bad memories of the IMF and blame its free-market economic policies for contributing to the country’s worst crisis in 2001-2002, when one of every five Argentines went unemployed and millions fell into poverty.

Seeing journalists filming screens showing the exchange rates in downtown Buenos Aires, Ruben Montiel, 55, burst out: “Macri is an embarrassment!

“You can’t live like this. The prices of everything go up on a daily basis,” he said. “There’s no work, utility rates have gone through the roof … people are sleeping on the streets.”

Macri, a pro-business conservative who came into office in 2015, had promised to trim Argentina’s fiscal deficit, reduce poverty and curb inflation. He cut red tape and tried to reduce the government’s budget deficit by ordering layoffs and cutting utility subsidies, but it triggered labour unrest.

Then in December, officials announced a rise in the inflation target, which caused investors to begin doubting Macri’s commitment to taming price rises.

Meanwhile, the peso slumped against the dollar as rising U.S. interest rates lured investors to pull greenbacks out of Argentina.

That caused jitters among Argentines, who have been used to stashing away dollars as a cushion since the 2001 crisis, when banks froze deposits and put up sheet-metal barricades as thousands of protesters unsuccessfully tried to withdraw their savings. Dozens died in protests and looting in December 2001 as the economy unraveled and Argentina eventually suffered a record $100 billion debt default.

“The government will need to shuffle its cabinet and strike deals with provincial governors for next year’s budget,” said Argentine economist Marcos Buscaglia. “In the short-term, the government just needs to stop this crisis.</s>Argentina’s Central Bank on Thursday increased its benchmark interest rate to 60%, the world’s highest, in an effort to halt a sharp slide in the value of the peso, which plunged to a record low.

Argentina’s Central Bank on Thursday increased its benchmark interest rate to 60%, the world’s highest, in an effort to halt a sharp slide in the value of the peso, which plunged to a record low.

The peso fell more than 15% against the dollar on Thursday, trading at 40.5 per greenback, after slipping about 7% the day before.

The Central Bank said in a statement that it was raising its benchmark interest rate by 15 percentage points to 60% in response to the currency problems and the risk of greater impact on local inflation, which is already running at about 30% a year.

The tumult in the exchange market came a day after President Mauricio Macri said he was asking for an early release of some IMF funds under a 50 billion US dollar (£38 billion) backup financing arrangement approved earlier.

Some experts said the announcement, combined with the interest rate hike, had the unintended effect of fuelling the crisis of confidence.

“I think today’s interest hike announcement will do nothing but leave investors even more jittery,” said Monica de Bolle, senior fellow at the Peterson Institute for International Economics.

Macri has struggled to calm markets and bring confidence to Argentines who continue to lose purchasing power.

Many are frustrated with job losses, higher utility rates and a rise in poverty levels.

Many also have bad memories of the IMF and blame its free-market economic policies for contributing to the country’s worst crisis in 2001-2002, when one in every five Argentines was unemployed and millions fell into poverty.

Seeing journalists filming screens showing the exchange rates in central Buenos Aires, Ruben Montiel, 55, burst out: “Macri is an embarrassment,

“You can’t live like this. The prices of everything go up on a daily basis,” he said. “There’s no work, utility rates have gone through the roof, people are sleeping on the streets.”

Macri, a pro-business conservative who came to office in 2015, had promised to trim Argentina’s fiscal deficit, reduce poverty and curb inflation.

He cut red tape and tried to reduce the government’s budget deficit by ordering layoffs and cutting utility subsidies, but it triggered labour unrest.

Then in December, officials announced a rise in the inflation target, which caused investors to begin doubting Macri’s commitment to taming price rises.

Meanwhile, the peso slumped against the dollar as rising US interest rates lured investors to pull greenbacks out of Argentina.

That caused jitters among Argentines, who have been used to stashing away dollars as a cushion since the 2001 crisis, when banks froze deposits and put up sheet-metal barricades as thousands of protesters unsuccessfully tried to withdraw their savings.

Dozens died in protests and looting in December 2001 as the economy unravelled and Argentina eventually suffered a record 100 billion dollar (£77 billion) debt default.</s>Argentina’s Central Bank on Thursday increased its benchmark interest rate to 60%, the world’s highest, in an effort to halt a sharp slide in the value of the peso, which plunged to a record low.

The peso fell more than 15% against the dollar on Thursday, trading at 40.5 per greenback, after slipping about 7% the day before.

The Central Bank said in a statement that it was raising its benchmark interest rate by 15 percentage points to 60% in response to the currency problems and the risk of greater impact on local inflation, which is already running at about 30% a year.

Many also have bad memories of the IMF and blame its free-market economic policies for contributing to the country’s worst crisis in 2001-2002, when one in every five Argentines was unemployed and millions fell into poverty.

Seeing journalists filming screens showing the exchange rates in central Buenos Aires, Ruben Montiel, 55, burst out: “Macri is an embarrassment,

“You can’t live like this. The prices of everything go up on a daily basis,” he said. “There’s no work, utility rates have gone through the roof, people are sleeping on the streets.”

Macri, a pro-business conservative who came to office in 2015, had promised to trim Argentina’s fiscal deficit, reduce poverty and curb inflation.

He cut red tape and tried to reduce the government’s budget deficit by ordering layoffs and cutting utility subsidies, but it triggered labour unrest.

Then in December, officials announced a rise in the inflation target, which caused investors to begin doubting Macri’s commitment to taming price rises.

Meanwhile, the peso slumped against the dollar as rising US interest rates lured investors to pull greenbacks out of Argentina.

That caused jitters among Argentines, who have been used to stashing away dollars as a cushion since the 2001 crisis, when banks froze deposits and put up sheet-metal barricades as thousands of protesters unsuccessfully tried to withdraw their savings.

Dozens died in protests and looting in December 2001 as the economy unravelled and Argentina eventually suffered a record 100 billion dollar (£77 billion) debt default.</s>Argentina's central bank hiked its benchmark interest rate from 45 to 60 per cent on Thursday, the highest in the world, in a dramatic but fruitless bid to shore up the peso, which plunged to a record low against the US dollar.

[BUENOS AIRES] Argentina's central bank hiked its benchmark interest rate from 45 to 60 per cent on Thursday, the highest in the world, in a dramatic but fruitless bid to shore up the peso, which plunged to a record low against the US dollar.

Despite the bank's extraordinary measure to impose one of the world's highest benchmark rates, the currency lost a further 13.5 per cent by the close - its biggest daily loss of the year.

The Argentine currency has now lost 53 per cent of its value since the beginning of the year, to trade at 39.87 to the dollar. It was worth around 18 to the dollar at the start of the year.

But the Merval index on the Buenos Aires stock market jumped 5.34 per cent to 26,754.85 points on the back of a 13.5 per cent rise in the share price of Brazilian petroleum giant Petrobras.

After the market close, Treasury Minister Nicolas Dujovne pledged to announce a set of new economic measures on Monday, and will target a fiscal deficit for 2019 that is lower than the current target of 1.3 per cent of gross domestic product in order to reduce the government's need to go to debt markets.

Earlier Marcos Pena, President Mauricio Macri's cabinet chief, was forced to deny the government was facing an economic disaster.

"We are not facing economic failure," said Mr Pena.

"This is a transformation, not failure. In that transformation there are difficult moments," he said.

Ratings agency Moody's said the central bank's move "is a clear signal that economic policy approaches have not been sufficient to contain the financial pressures facing Argentina."

Crisis gripped the South American giant's economy over the previous 24 hours.

Mr Macri had on Wednesday unexpectedly requested an acceleration to the IMF funding of US$50 million agreed in June.

The government has already drawn down a first tranche of US$15 billion - some of which has been used to try and prop up the peso.

A statement from the president aimed at calming the markets appeared to have done the opposite after his request - effectively to get early access to the remaining US$35 billion of the loan - sent the peso plummeting almost 7.0 per cent by the close.

Despite explicit support from the International Monetary Fund for his policies, the peso opened a further 4.0 per cent lower on Thursday - prompting the Central Bank's intervention.

The bank pledged to keep interest rates unchanged at 60 per cent until at least December.

IMF chief Christine Lagarde said on Wednesday she had agreed to Mr Macri's request to speed up disbursement of the loan in a bid to shore up Argentina's battered economy.

In return for IMF support, the government has committed to reducing its budget deficit to 2.7 per cent this year, from 3.9 per cent in 2017, and to 1.3 per cent of GDP next year.

But analysts said the government needs to provide more detail about how it plans to achieve aggressive IMF fiscal targets, if markets are to be assuaged.

On top of that, the government faces a major obstacle in November, when a US$7 billion foreign exchange debt repayment is due.

"This will be a key flashpoint," said Edward Glossop, Latin American specialist with Capital Economics.

"Regardless of what happens from here, the country's weak balance sheets mean that Argentine markets will remain extremely vulnerable to swings in investor risk appetite," added Mr Glossop.

Speaking at the opening of the Council of the Americas business chamber in Buenos Aires, Mr Pena attributed the market volatility to Argentina's recent history.

"We are the country that has the most times violated its international contracts in the world, which has lied and cheated the rest of the time, and has shown again and again - until now - that it is not willing to seek fiscal balance and depend on its own resources," he said.

He insisted the path taken by Mr Macri, since he took office in December 2015 after the free-spending leftist government of Cristina Kirchner, is one "of fiscal balance, development and growth." .

The current exchange turbulence was attributable to "structural vulnerabilities" following a massive drought that affected agricultural production, the main generator of foreign currency, and a "change in the financial and commercial context in the world, notably due to tensions between the United States and China," Mr Pena said.

"There are no magic solutions, you have to go for the truth." Mr Macri had sought to soothe the turbulence in a statement before markets opened on Wednesday, assuring Argentines that help is on the way.

"Over the past week, we have had new expressions of lack of confidence in the markets, especially over our ability to obtain financing for 2019," Mr Macri acknowledged.

He said the IMF would provide "all the funds necessary to guarantee the fulfillment of the financial programme next year."</s>Argentina’s central bank on Thursday raised its benchmark interest by 15 percentage points to 60 percent, the highest in the world, after the peso plummeted to a new record low.The move comes one day after President Mauricio Macri announced he had requested the International Monetary Fund to speed up disbursements from a $50 billion credit line, in order to demonstrate the country had enough cash on hand to fund the 2019 budget without going further into debt.Earlier on Thursday the peso fell to a fresh record low of 40.00 per U.S. dollar . It pared some of its declines following the central bank announcement. The peso is down 49 percent this year.Macri’s government has struggled in the past five months to convey a viable strategy to shore up the economy, cut budget and current-account deficits, and tame inflation running at more than 30 percent a year.While analysts have praised moves such as obtaining the IMF credit line in June and previous rate increases, there’s also lingering suspicion that officials lack the political will to make the spending cuts and tax increases necessary to tame inflation and restore growth.The IMF said on Wednesday it will review the timing for doling out the remaining funds from the loan and collaborate with Argentina on a plan to bolster the economy.
Argentina hikes interest rate to 60%, the highest in the world, as its currency plunges.