December 4, 2018 / 10:16 PM / 7 days ago

UPDATE 1-Argentina maintains 2018 inflation forecast at 47.5 pct -poll

(Adds context on interest rate floor, short-term Leliq notes auction)

BUENOS AIRES, Dec 4 (Reuters) - Economists maintained their estimate for year-end inflation in Argentina, which is expected to reach 47.5 percent in 2018, a central bank poll showed on Tuesday.

Two sources at the central bank previously said that the bank would eliminate the 60 percent floor on its benchmark interest rate if economists lowered their year-end inflation forecast in this month’s central bank poll.

The central bank declined to comment on whether the bank would change its policy.

The central bank hiked its benchmark policy rate to a record 60 percent in August after Argentina’s peso currency suffered repeated rounds of devaluation, losing around half its value in 2018.

The central bank has also issued short term debt at high interest rates to sop up liquidity in the peso.

Argentina’s central bank auctioned 163.6 billion pesos (some $4.4 billion) in short-term “Leliq” notes at an annual interest rate of 60.003 percent, skirting the bank’s key rate floor.

The central bank poll showed Argentina’s economy is expected to contract 2.4 percent in 2018, and shrink 1.2 percent in 2019.

The currency crisis prompted the country to ink a $56.3 billion financing deal with the International Monetary Fund, the largest rescue package in IMF history to ensure it would meet its financing needs through 2020. (Reporting by Scott Squires; editing by Grant McCool)

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