BUENOS AIRES Feb 21 Argentina's central bank
kept its monetary policy rate unchanged at 24.75 percent for the
twelfth consecutive week on Tuesday, though it said inflation in
February would likely be higher than in previous months as a
result of increases in regulated prices.
Consumer prices in greater Buenos Aires rose 1.3 percent in
January, far below expectations and in line with the central
bank's target for inflation between 12 and 17 percent in 2017.
But a hike in electricity prices took effect in February,
and the government plans to continue raising prices of other
public services in the coming months as part its effort to cut
subsidies and reduce the fiscal deficit.
In a statement, the central bank did not cite "mixed
signals" about the evolution of prices, as it had in recent
weeks, instead noting that the indicators it monitors suggest
that "inflation in February will show an increase with respect
to the level of previous months."
"Even though core inflation in January was slightly below a
path consistent with our annual goal of 12-17 percent ... the
outlook for February and expectations for increases in regulated
prices in the coming months merit a cautious attitude," the
central bank wrote.
Inflation expectations for 2017 fell slightly to 20.8
percent, a central bank poll of economists showed earlier this
month, down from 21 percent a month earlier but well above the
Consumer prices rose about 40 percent in 2016 with the
economy in recession. Inflation slowed considerably in the
second half of the year, clocking in at 1.6 percent in November
and 1.2 percent in December.
Beginning in March, the central bank will make interest rate
decisions every two weeks, rather than every week, as it moves
to normalize monetary policy.
(Reporting by Luc Cohen; Editing by Richard Chang)