September 13, 2016 / 10:12 PM / 2 years ago

Argentina central bank cuts reference rate for 7th straight week

BUENOS AIRES, Sept 13 (Reuters) - Argentina’s central bank cut its 35-day reference rate by 50 basis points on Tuesday, the seventh cut in as many weeks as policymakers try to revive the local economy amid signs of lower inflation.

The bank cut the rate to 27.25 percent, a move aimed at pushing cash into the real economy by making short-term central bank notes less attractive to investors. The tactic helps gross domestic product grow but can also be inflationary.

“The monetary authority will continue proceeding cautiously, looking for the disinflation process observed in recent months to continue over time,” the central bank said in a statement.

Analysts in a central bank poll expect inflation of 41 percent this year and 19.8 percent in 2017. They see gross domestic product shrinking 1.5 percent this year before rebounding to 3.2 percent growth in 2017.

Earlier on Tuesday the state statistics agency Indec said the inflation rate was 0.2 percent in greater Buenos Aires in August, marking a steep decline over the previous three months.

Macri ordered a reform of Indec to make Argentine statistics more credible after many accused his predecessor of sugar coating data. (Reporting By Walter Bianchi; Editing by David Gregorio)

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