October 11, 2016 / 9:22 PM / 2 years ago

Argentina central bank holds policy rate for third week

BUENOS AIRES, Oct 11 (Reuters) - Argentina’s central bank kept its reference rate unchanged at 26.75 percent for the third straight week on Tuesday as it tries to lower inflation expectations.

A central bank poll of economists last week showed expectations for inflation of 39.6 percent in 2016 and 20 percent in 2017. The bank’s inflation target for next year is 12 to 17 percent.

“For the convergence of inflation expectations in 2017 toward the target, the central bank has decided to maintain its policy rate at 26.75 percent,” the central bank said in a statement.

Consumer prices slowed to just 0.2 percent on a monthly basis in August after the Supreme Court ordered the government to suspend subsidy cuts that had lifted home heating gas prices. The government reinstated the subsidy cuts last week, however, meaning consumer prices will likely start to rise again.

Finance Minister Alfonso Prat-Gay said on Monday that Argentina is “shooting” for inflation to fall to 1.5 percent month over month by the end of the year. (Reporting by Caroline Stauffer; editing by Grant McCool)

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