Argentina’s central bank has decided to keep injecting cash into the economy at the current pace, the news reports said. This move may further stoke inflation that is among the fastest in the world, the news reports said.
In its 2012 monetary program, the bank said it aims to expand the M2 money supply, which includes cash plus checking and savings accounts by 26.4% in 2012. The bank has targeted monetary growth of 28% this year.
According to the bank, South America’s second-biggest economy should expand for a 10th straight year in 2012, by between 4.5% and 7.5%.
According to private economists, the consumer prices rose about 25% this year. The rise in consumer prices is more than any major global economy except Venezuela as President Cristina Fernandez de Kirchner increased government spending to spur consumer demand and boost local production, he added.
Meanwhile, the government said that inflation was running at 9.5% in November. The central bank plans to buy $9 billion in the foreign exchange market in 2012 to prevent excessive peso volatility.
As per central bank data, the policy makers have been able to offset decade-high capital flight of $8.4 billion in the third quarter by increasing money supply which rose 5.8% in 30 days ending December 16.
