January 25, 2017 / 8:33 PM / a year ago

UPDATE 1-Argentina central bank to set key rate every 2 weeks from March

(New throughout, adds China currency swap, expected economic recovery)

BUENOS AIRES, Jan 25 (Reuters) - Argentina’s central bank will set its reference rate every two weeks starting in March to provide more stability and certainty, its president Federico Sturzenegger said on Wednesday.

Under President Mauricio Macri the central bank has been striving to normalize monetary policy and prove its independence. The rate is currently set every week and has been held at 24.75 percent for eight weeks.

Sturzenegger said the bank’s goal is to eventually get to a monthly policy rate.

In a quarterly press conference, he also said Argentina hoped to renew a currency swap program with China when it expires in June.

Currency swaps negotiated by the previous government were key for Argentina when it was cut out of global capital markets. Macri’s government reached an agreement with holdout creditors shortly after taking office, taking Argentina out of default and granting access to international bond markets.

Sturzenegger said the central bank is also working on a deal with 20 banks to develop instruments to invest reserves, which in October swelled above $40 billion for the first time since 2013.

While markets have reacted favorably to Macri’s reforms, his first year in office ended with the economy mired in recession and inflation of around 40 percent.

However, the central bank’s leading internal indicator suggests the economy is in a recovery phase, said Maria Fernanda Martijena, director of economic and financial analysis at the bank.

She said the indicator hit a low point in June or July and in December reached a level that normally indicates a looming exit from recession. (Reporting by Luc Cohen; Writing by Caroline Stauffer; Editing by David Gregorio)

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