Key insights
- Argentina's intention to lower interest rates despite persistent inflation creates uncertainty. While seemingly isolated, instability in emerging markets can indirectly impact global risk sentiment and potentially trigger minor risk-off behavior in US equities. Argentina's commitment to fiscal discipline is a positive sign, but the timing of rate cuts remains a concern.
Buenos Aires, May 6 (Reuters) - Argentina should approach the markets with lower interest rates, the country’s Secretary of Economic Policy, Jose Luis Daza, said Wednesday during an event.
Persistent inflation in Argentina has been one of the main factors holding back interest rate cuts. Inflation, which has been creeping upward, is set to cool this year by less than previously expected, according to economists.
Daza also said that Argentina is not issuing new debt.
"We are not going to abandon fiscal discipline," Daza said during a Moody’s event in Buenos Aires, adding that the government of President Javier Milei "will not artificially stimulate the economy with fiscal tricks, such as temporary tax cuts, just to win an election".
Argentina’s next presidential election is in 2027.