© Reuters. FILE PHOTO: A one hundred Argentine peso bill sits on top of several one hundred U.S. dollar bills in this illustration picture taken October 17, 2022. REUTERS/Agustin Marcarian/Illustration/File Photo
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BUENOS AIRES (Reuters) – Argentina’s central bank will raise the benchmark interest rate to 118% from 97% previously, an official source said Monday, adding the country’s currency will be devalued to 350 pesos per dollar in the aftermath of a shock primary election.
Sunday’s primary vote, seen as a reliable bellwether for the upcoming presidential elections, propelled ultra-right libertarian outsider Javier Milei, who wants to axe the central bank and dollarize the economy, to first place with some 30% of the vote.
The official peso plunged nearly 18% on Monday morning to just over 350 pesos per dollar and the source said the exchange would be fixed at this rate until the October presidential vote.
Latin America’s third-biggest economy is battling a severe economic crisis with sky-high inflation and dwindling central bank reserves.