Argentina’s exposure to capital flows limits central bank actions
Peso seen as likely to remain under pressure despite forex interventions and sharp tightening
Argentina’s exposure to international financing is likely to hamper the extraordinary measures implemented by the central bank last week to stabilise the peso, analysts say.
The Central Bank of Argentina sharply increased interest rates from 45% to 60% on August 30, after an extraordinary meeting of the monetary policy committee. The measure followed days of steep depreciation of the peso, which dropped 25% against the US dollar between August 28 and a trough of 41.25 on August 30. A day after
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