August 2, 2016 / 10:57 PM / 2 years ago

Argentina drops reference rate slightly after holding for three weeks

BUENOS AIRES, Aug 2 (Reuters) - Argentina’s central bank lowered its 35-day reference rate by 25 basis points on Tuesday, and said that it would move to “cautiously” consolidate disinflation in the future.

Up until mid-July, the central bank slashed the reference rate every week for more than two months, signaling confidence that inflation was slowing and helping make investments more attractive in the recession-mired country.

The bank then held the rate for three weeks, before returning to modest cuts on Tuesday. The rate now stands at 30 percent.

“With eyes toward consolidating disinflation, the monetary authority will continue proceeding with caution,” the bank said in a statement.

“The will continue maintaining a clear anti-inflationary bias to ensure that the disinflation process continues to its objective this year of monthly inflation of 1.5 percent or less in the last quarter.”

National statistics agency Indec has yet to report an annual inflation rate since the agency underwent reforms earlier this year, though authorities have produced monthly figures.

In its statement, the bank said that according to a survey it completed Tuesday, inflation expectations for the coming months bumped up a slight 0.1 percentage points. The market now expects a monthly inflation rate of 1.7 percent in the fourth quarter, it said.

The bank added, however, that “all indicators” from state and private sources showed a “significant drop” in inflation in July. (Reporting by Gram Slattery and Walter Bianchi; Editing by Chris Reese)

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