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LatinNews Daily - 31 August 2018

In brief: Argentina

Argentina: Argentina’s central bank (BCRA) has increased its benchmark interest rate from 45% to a record high 60% in a bid to stem capital flight from the country. The move by BCRA came as the value of the Argentine peso plummeted further on 30 August despite the announcement by President Mauricio Macri that his government would request a cash advance from the US$50bn credit line it has with the International Monetary Fund (IMF) to shore up Argentina’s finances and restore confidence in the peso. However, Macri’s announcement failed to calm the market and the value of the peso fell by 10.72% against the US dollar to trade at Ar$38.20/US$1 yesterday. The interest rate increase by BCRA prompted Moody’s Investor Services, the international credit ratings agency, to issue a note saying that the move would only “accentuate and prolong the emerging economic recession” in Argentina.

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