BUENOS AIRES, Dec 14 (Reuters) - Argentina's central bank is working against the clock to push through a devaluation this week, a senior bank official said on Monday, although it will not allow the exchange rate to weaken to more than 15 pesos per U.S. dollar.
Mauricio Macri, a centre-right advocate of free markets, took office last week as president, ending 12 years of Peronist rule. Macri has vowed to open up the economy and reduce state interventionism, including propping up the peso.
According to the official exchange rate, one U.S. dollar is worth 9.785 Argentine pesos, whereas on the black market, it is worth 14.69 pesos. Most of the country's transactions take place between the official and black market rate.
Macri has said he wants the two rates to converge. His critics fear that a sharp devaluation of the official rate will send inflation, which private economists already estimate at around 25 percent, soaring further.
"We are working hard, we want to bring about change as soon as possible but without committing errors, and that is why the implementation (of this policy change) should come this week," the official said, noting however that all policy decisions were still in flux.
"We will keep the managed floating exchange rate with an upper limit around 15 pesos per dollar."
Local market traders are already factoring in a devaluation this week.
The official said the bank expected the devaluation to prompt grains exporters to sell around $3 billion of goods by the end of the year, resulting in an inflow of dollars.
If a deal in negotiation with Wall Street banks for a credit line of up to $7 billion also comes off, Argentina should see its low foreign reserves considerably bolstered, the official said.
That in turn should enable the government to lift capital controls, freeing up hard currency for importers and savers. This will likely happen gradually, however.
The central bank's reserves are currently just below $25 billion, although private analysts estimate net reserves are just a fraction of the gross figure.
The official added that the bank would also sharply hike its interest rates from around 26 percent at the moment, in order to incentivize Argentines to keep their money in pesos rather than change into dollars. (Writing by Sarah Marsh; Editing by Bernard Orr)