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Milei, who is pledging economic shock therapy such as shutting the central bank and dollarization, won a second-round runoff vote on Sunday with some 56% to rival Sergio Massa's 44%. Milei now faces the huge challenge of turning around the economy once he takes office on Dec. 10. "It is an economy that is in intensive care," said Miguel Kiguel, a former undersecretary of finance at the Economy Ministry in the 1990s. A central bank poll of analysts forecast 185% inflation by the end of the year. In a bid to tamp down inflation Argentina's central bank has hiked the benchmark interest rate to 133%, which encourages saving in pesos, but hurts access to credit and economic growth.

Persons: Javier Milei, Sergio Massa's, Milei, Miguel Kiguel, Lucio Garay Mendez, Vaca Muerta, Eugenio Marí, Hernan Nessi, Adam Jourdan, Daniel Wallis, Chris Reese Organizations: Economy Ministry, Reuters Graphics Reuters, Coldplay, Reuters Graphics, CENTRAL, International Monetary Fund, Libertad y Progreso Foundation, Thomson Locations: BUENOS AIRES, dollarization, Argentina, China, Brazil

☆ Argentina braces for election with economy in 'intensive care'
▼ + stars: | 2023-10-19 | by ( Eliana Raszewski | ) www.reuters.com time to read: +5 min

"It is an economy that is in intensive care," Miguel Kiguel, a former undersecretary of finance at the Economy Ministry in the 1990s, told Reuters. "The main challenge is to get Argentina out of stagnation, but to do that you have to lower inflation." J.P. Morgan has estimated inflation will end 2023 at 210%, while a central bank poll of analysts forecast 180%. In a bid to tamp down inflation Argentina's central bank has hiked the benchmark interest rate to 133%, which encourages saving in pesos, but hurts access to credit and economic growth. Milei wants to ditch the peso completely and dollarize the economy, while Bullrich says she favors a dual peso-dollar system.

Persons: Javier Milei, Sergio Massa, Patricia Bullrich, Miguel Kiguel, J.P, Morgan, Fernando Morra, Bullrich, Eliana Raszewski, Adam Jourdan, Daniel Wallis Organizations: Argentine, Buenos Aires, Argentina, Economy Ministry, Reuters, Reuters Graphics Reuters, Coldplay, Reuters Graphics, CENTRAL, International Monetary Fund, Thomson Locations: Buenos Aires, BUENOS AIRES, Argentina, China, Brazil

☆ Argentina raises interest rate to 97% as it struggles to tackle inflation
▼ + stars: | 2023-05-15 | by ( Stefano Pozzebon | ) edition.cnn.com time to read: +2 min

CNN —The Central Bank of Argentina raised its key interest rate Monday by six percentage points to 97% in an effort to tackle soaring inflation that has reached 30-year highs. Central banks across the globe are struggling to rein in inflation, but it’s a particular problem in Argentina, where the annual inflation rate soared above 100% last month. (By comparison, inflation hovers below 5% in the US, where the central bank has raised key interest rates by five percentage points over 14 months.) Argentina’s central bank is also hoping the rate hike will incentivize investments in the country’s currency, according to the central bank’s statement released Monday. “When a central bank raises the interest rate, the effects are felt some two or three months afterward, and that timescale is not effective in Argentina’s situation.”— Elisabeth Buchwald contributed reporting.

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