Battered Argentine peso rises after interest rate jump

BUENOS AIRES, Argentina – Argentina’s peso has rebounded following the government’s decision to boost the reference interest rate to 40 per cent.

The peso was selling at 22.20 per dollar in the afternoon, recovering from a record of 23.30 on Thursday afternoon. It was one of several international currencies hurt by rising U.S. Treasury bond yields.

Argentina’s Central Bank moved to halt the peso’s slide by raising interest rates, while Treasury Minister Nicolas Dujovne said the government would also cut its fiscal debt target to 2.7 per cent of GDP from 3.2 per cent.

He told reporters Friday the country is on “a path toward fiscal equilibrium.” But he acknowledged that the interest hike could keep the inflation rate from dropping this month.