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LatinNews Daily - 27 April 2018

In brief: Argentina

Argentina: Treasury Minister Nicolás Dujovne has said that the sharp fall in the value of the Argentine peso compared to the US dollar in recent days will only have a “minor impact” on the country’s inflation rate. Dujovne’s comments came after the value of the peso fell to a new low of Ar$20.84/US$1 on 26 April after successive falls recorded in the last four days. The devaluation of the peso came despite the efforts to prop it up by the central bank (BCRA), which has sold some US$3bn in the local currency markets in the last four days and increased its short-term Lebac interest rate by 3.2 percentage points to 29.50%. However, this has not stopped the slide producing concerns that this will now start producing significant inflationary pressures and push the already high inflation rate (running at over 10%) even higher. Yet Dujovne yesterday sought to allay these concerns by stating that the lower exchange rate would not yet have a major impact in domestic prices and reassuring that the BCRA “is working to bring down inflation”.

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