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Argentina's inflation rate has accelerated for the third consecutive month in March, the government statistics agency said Tuesday, inviting the central bank to unveil new measures to curb inflation and protect the peso currency.
Consumer prices in the recession-hit country rose 4.7% for the month, bringing the cumulative increase to 11.8%. The 12-month rolling inflation rate stands at 54.7 percent, according to the National Institute of Statistics and Census (INDEC).
"This is a very bad figure," said Alberto Bernal, chief emerging markets strategist at XP Investments in New York, adding that this would force the country's central bank to maintain extremely high rates to protect the currency. peso.
Argentina has taken measures to combat inflation since last year, when prices rose by 47.6%, undermining consumer purchasing power and curbing the popularity President Mauricio Macri in preparation for the decisive legislative elections to be held later this year.
The # 3 economy in Latin America was also affected by the financial turmoil that plunged one-third of the population into poverty, forced up interest rates and caused the fall of the besieged peso by compared to the dollar.
At a press conference, Guido Sandleris, head of the Argentine central bank, said the bank thought that the pace of inflation would begin to slow down from April.
He added that the central bank would strengthen the "contractionary bias" of monetary policy, which includes freezing a range of peso trading without intervention until the end of the year and its refusal to buy dollars to control the currency if it gets stronger out of the range until the end of June.
The bank had bought close to $ 1 billion at the beginning of the year to help bring the currency back into the range.
The International Monetary Fund said it welcomed the announcements from the central bank.
"We are confident that continued efforts in this direction will help reduce inflation in the coming months," IMF spokesman Gerry Rice said in a tweet.
"Intense" data
Goldman Sachs said in a customer note that the much higher than expected jump was due to higher prices for food, clothing, regulated prices and seasonal tuition fees.
The investment bank described the March data as "intense", adding that, if annual inflation is expected to moderate, it should still end in 2019 at an "extremely high" level of 36. %.
The Argentine peso, one of the worst performing currencies of the year in the world, fell 1.79% on Tuesday after recovering last week after a record low against the dollar.
Economists surveyed by the Argentine central bank earlier this month have sharply raised their inflation forecast for the year 2019 to 36% from an earlier estimate of 31.9%.
Analysts said price increases may begin to peak and should start slowing from next month. The gain in March is the fastest since last October, when prices rose 5.4%.
"It is only in May that we will see a slowdown in monthly inflation due to the lower impact of tariffs and the monthly economic situation," said Lorenzo Sigaut Gravina, director of the cabinet of Ecolatina advice.
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