July 12, 2016 / 11:37 PM / 2 years ago

Argentina leaves reference rate unchanged after 9 weeks of cuts

BUENOS AIRES, July 12 (Reuters) - Argentina’s central bank on Tuesday left its 35-day reference interest rate unchanged at 30.25 percent after cutting it for nine weeks straight but said it still expects inflation to slow in coming months.

The central bank said it was pausing its monetary stimulus to help consolidate efforts to ease the country’s double-digit inflation rate.

“Both the Central Bank of Argentina and the consensus of market analysts expect the process of disinflation to continue in coming months,” the central bank said in a statement.

The bank had cut the reference rate every week for more than two months, signaling confidence that inflation was cooling and helping make brick-and-mortar investments more attractive as the country remains mired in recession.

Consumer prices likely rose 2.5 percent in June, according to a Reuters poll, pointing to a slowdown from the 4.2 percent rise reported by national statistics agency Indec for May.

The central bank said, however, that indicators showed mixed signs on core inflation in June and added that it would continue to work to bring the monthly rise in inflation to its goal of no more than 1.5 percent in the fourth quarter.

Indec, which has yet to report an annual inflation rate since the agency underwent reforms earlier this year, is scheduled to release inflation data for June on Wednesday.

The finance minister has estimated that 12-month inflation through May was 40 to 42 percent.

Center-right President Mauricio Macri, who took office in December, has rolled out a raft of free-market reforms that have pushed up consumer prices, including floating the peso , which boosted the cost of imported goods, and cutting subsidies that had kept utility prices low.

Reporting By Eliana Raszewski, Writing by Mitra Taj; Editing by Cynthia Osterman

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