(Adds quotes from Sturzenegger, details on Argentina inflation,
BUENOS AIRES Feb 23 Argentina's central bank
chief Federico Sturzenegger said on Thursday that salary hikes
for some unions in 2017 that may be above its 17 percent maximum
inflation target would not threaten achieving that goal for the
Sturzenegger said he did not see room to relax monetary
policy at the moment, however, noting that the three months from
February through April would be "more delicate in terms of
inflation." The central bank has held its policy rate steady at
24.75 percent for 12 straight weeks.
In the coming months, increases in regulated prices would
impact the overall consumer price index more than the bank had
been experiencing previously, Sturzenegger said, reiterating the
bank's target for inflation between 12 percent and 17 percent in
"Due to this, but also because the 1.2 percent-1.3 percent
pace of monthly increases in non-regulated prices since November
is too high for what we're aiming for this year, we don't see
any room at the moment for relaxing monetary policy,"
President Mauricio Macri's government has in recent months
announced subsidy cuts for several public services, including
electricity and transportation, helping reduce the fiscal
deficit but resulting in higher consumer prices.
Inflation last year totaled 40 percent, and many of
Argentina's powerful unions are currently negotiating salary
increases with employers to try to recoup purchasing power lost
last year and avoid real salary losses this year.
Sturzenegger said salary hikes "slightly above" the central
bank's target range would not compromise the monetary
authority's ability to comply with its goal. He said
current-year salary increases should not be analyzed without
considering the path of inflation last year.
"For now, we see the process of wage negotiations coming
along in large part aligned with the institution's inflation
goals," Sturzenegger said.
The bankers' union negotiated a wage increase of 24.3
percent last week, while the Buenos Aires province teachers
union, which is demanding a 35 percent increase, is at an
impasse with the government, which wants to raise salaries by 18
percent. The two unions are seen as bellwethers for the private
and public sectors, respectively.
In a statement earlier this week, the central bank had said
inflation in February would be higher than in previous months.
(Reporting by Luc Cohen; Editing by Chizu Nomiyama)