January 17, 2017 / 8:55 PM / 2 years ago

Argentina central bank holds policy rate steady for 7th straight week

BUENOS AIRES, Jan 17 (Reuters) - Argentina’s central bank kept its monetary policy rate unchanged at 24.75 percent for the seventh week in a row on Tuesday, citing expectations for falling core inflation in the coming months but warning of “mixed signals” for inflation in January.

Government data last week showed consumer prices rose 1.2 percent in December, a lower rate than the prior two months.

That meant inflation averaged 1.4 percent per month in the second half of 2016, which the central bank said in a statement was within its target range. The monetary authority had been aiming for 1.5 percent monthly average annual inflation for the final quarter of the year.

December core inflation was 1.7 percent, which the central bank said was in line with the average for the second half of 2016 but was expected to show a “downward trend” in the coming months, since regulated prices were expected to rise more than the rest of the consumer price index’s components this year.

Still, the central bank said the estimates and indicators it monitors “show mixed signals regarding the evolution of prices so far in the month of January” in explaining its decision to leave rates unchanged.

“This institution is awaiting further developments of these variables,” the statement said.

Consumer prices rose about 40 percent in 2016 with the economy in recession. The central bank is targeting inflation of between 12 percent and 17 percent in 2017, though economists see it at above 20 percent. (Reporting by Luc Cohen; Editing by Diane Craft and Lisa Shumaker)

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