Argentina Cuts Interest Rates Again Despite High Inflation, Risking Further Currency Instability

• Argentina's central bank unexpectedly cut its benchmark interest rate to 80% from 100% as monthly inflation cools while the peso strengthens

• The rate cut comes despite IMF guidance to tighten monetary policy to support money demand and disinflation

• Monthly inflation is cooling from 21% in January to a projected 15% in February, though annual inflation remains over 250%

• The rate cut follows a similar cut in December that led many Argentines to pull money from peso deposits to spend or dollarize

• While monthly inflation cools and the peso strengthens, austerity measures have led to economic recession and real wages at their lowest since 2003