Government data released on Wednesday showed Argentina's annual inflation rate soared to 78.5% in August, hitting a new high of 30%. It is almost certain that Argentina’s central bank will raise interest rates again sharply as early as this week. Inflation in August exceeded anal

Government data released on Wednesday showed that Argentina's annual inflation rate soared to 78.5% in August, hitting a new high of 30%. It is almost certain that the Argentine central bank will raise interest rates again significantly as early as this week.

htmlThe inflation rate in 18 exceeded the median forecast of analysts 3 of 78.2%, setting a new high in 30 years. Among them, clothing prices increased by 109% year-on-year, and food prices increased by 80%. Worse could yet happen as the government increases regulated utility charges in September, which will have a knock-on effect across multiple industries.

Economists believe: "Monetary tightening will not be enough to cool price rises in the short term. Cuts in energy subsidies and the accelerated depreciation of the peso will push inflation to close to 90% by the end of the year."

Raising interest rates to levels close to the annual inflation rate is part of the Argentine government's efforts to encourage savers to stick with the peso. It is also a key pillar of Argentina's $44 billion deal with the International Monetary Fund (IMF), which calls for so-called positive interest rates.

The current benchmark interest rate of the Argentine Central Bank is 69.5%. The bank raised interest rates by 950 basis points last month, the eighth rate increase this year.