Argentina hikes interest rates to 40% amid inflation crisis



The article reports the high Interest rates of 40% set by the Argentina Central bank in response to the high Inflation figures of above 25% .The Latin American country’s central bank announced the hike , the third in seven days, saying it would keep using the tools at its disposal to get inflation back down to it 15 per cent target. The Central Bank is moving towards higher interbank lending rates and tightened controls on Fiscal Budget .


Topics covered are Interest rates, Inflation, relationship between Interest rates and Inflation, Contractionary monetary policy and its consequences. Explain using the National output diagrams and discuss the combined effect of Contractionary monetary policy on Inflation, Economic Growth and Unemployment.


Evaluation will include effectiveness of Monetary policy to tackle Inflation and its further effects on Unemployment, Economic Growth, impact on the consumers, producers and society in short term and long term.