Argentina Eases Inflation

Argentina eased its inflation targets for the next two years, allowing the central bank to pursue looser monetary policy in a bid to support a weak economic recovery. The peso plunged the most in two years, Bloomberg reported. The monetary authority will now aim for inflation of 15% in 2018, up from a previous target of 8% to 12%, Treasury Minister Nicolas Dujovne told reporters in Buenos Aires on Thursday. The government also relaxed its 2019 inflation target to 10% and set a goal of 5% for 2020. The decision to move inflation goalposts comes as President Mauricio Macri misses this year’s 12-17% target despite a monetary tightening campaign that is beginning to weigh on economic growth. Disagreements between central bank chief Federico Sturzenegger and other members of Macri’s economic team have simmered below the surface throughout his two years in office, with some pushing for lower rates to help lift the economy out of recession. “By making our objective more gradual, this will allow for an easing of monetary policy,” Sturzenegger said.