Argentina’s central bank has hiked its key interest rate to 69.5% in an effort to rein in rising inflation. The bank raised its 28-day benchmark rate by 9.5% percentage points, the second increase in two weeks.

It comes as new data show that inflation in the country has reached a 20-year high of more than 70 per cent. After the latest US data indicated that inflation had moderated, the numbers disappointed optimism that price gains had peaked.

“The rise in the policy rate will help reduce inflation expectations for the remainder of the year,” the bank said in a statement.

The rate was lifted by 8 percentage points two weeks ago, marking the bank’s eighth increase this year. By the end of the year, the country’s inflation rate is expected to exceed 90%.

Controlling surging prices, addressing excessive debt levels, and reigning down government spending in South America’s second largest economy are at the top of Sergio Massa’s agenda as Argentina’s new economy minister.

Massa, the third person to hold the position since early last month, intends to control inflation in a more traditional manner than his predecessors.

Along with rising interest rates, he has promised not to ask the central bank to print more money to fund government spending this year.

Martn Guzmán resigned as finance minister in July after serving for more than two and a half years. Silvina Batakis, his successor, was only in office for a month.

Argentina avoided defaulting on a $44 billion International Monetary Fund loan earlier this year.

However, the impact of the measures that the government must execute in order to meet the terms of the agreement is a major source of anxiety for many in the country.

Protesters have flocked to the streets of Buenos Aires in recent weeks to denounce President Alberto Fernández’ handling of the economy.

(Adapted from BBC.com)

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