BUENOS AIRES (Reuters) - Argentina's central bank hiked interest rates on its short-term securities on Tuesday in its monthly auction, the second such increase in the past three months as it seeks to soak up pesos and rein in stubbornly high inflation.
The monetary authority sold 467.623 billion pesos ($27.11 billion) in Lebac securities, compared with the 532.022 billion pesos worth of securities that matured. It raised the interest rate on the 28-day Lebac, the shortest-term security on offer, to 26.5 percent, up from 25.5 percent last month.
The central bank is targeting inflation of between 12 percent and 17 percent this year, well below economists' expectations for 21.5 percent inflation. Consumer prices rose 11.8 percent in the first half of the year.
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"Core inflation has shown a persistence with which we're not completely comfortable," central bank President Federico Sturzenegger told reporters on Tuesday. "This persistence of core inflation is what has obliged us, or driven us, or motivated us to harden our monetary policy stance."
The central bank no longer considers the short-term Lebac yield as its benchmark interest rate, turning instead to the seven-day interbank lending rate at the start of this year. It hiked that rate to 26.25 percent in April and has since held the rate steady.
($1 = 17.25 Argentine pesos)
(Reporting by Walter Bianchi; Writing by Luc Cohen)