August 13, 2018 / 4:46 PM / 3 months ago

UPDATE 1-Argentina to increase benchmark interest rate to 45 pct -cenbank

(Adds cenbank decision to reduce lebacs, IMF comments, and treasury ministry decision to stop US dollar sales)

BUENOS AIRES, Aug 13 (Reuters) - Argentina increased its benchmark interest rate to 45 percent from 40 percent, the central bank said on Monday, after the peso currency tumbled in response to a local corruption scandal and a currency crisis in Turkey.

The central bank will also issue less in lebac, or short-term debt issued by the central bank that will mature to reduce indebtedness, bank officials said on Monday.

The decision to issue less in lebac “should remove an important source of vulnerability,” the International Monetary Fund (IMF) said in a statement on Monday.

Argentina’s treasury ministry instructed the central bank to discontinue its daily sale of U.S. dollars due to liquidity in the peso, the ministry said in a statement.

Reporting by Scott Squires Editing by Susan Thomas

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