Argentina’s central bank has raised interest rates for the third time in one week as the peso, continues to fall sharply.
Over a month, the value of the peso has melted by about 10%, mainly due to the rise in US treasury bill rates. This forced the Central Bank of Argentina on May 4, 2018 to raise interest rate to 40% (the highest level in the world). By raising its rate, the central bank is trying to convince Argentineans to invest their money rather than buying dollars, a safe haven when inflation is high.
Argentina seeks $30 billion from the IMF to calm markets and to help to stabilise economy. President Macri has begun talks on a financing deal with IMF Director Christine Lagarde on May 8, 2018.