New key rate cut expected in Argentina

Argentina's financial market expects a new cut to the central bank's benchmark interest rate on Tuesday when the bank holds its auction for the 35-day Lebac bonds.

The Lebac rate is currently at 36.75%.

The monetary authority has cut the Lebac rate by 125 basis points during the last two months but this is still a small decrease when considering how high the rate is, local business daily Cronista reported Economía & Regiones as saying.

"The marginal rate cuts performed by the authority are a sign that they are proceeding with caution, waiting for clearer indications of the evolution of inflation," the local research firm noted.

Month-on-month inflation in the capital Buenos Aires jumped to 6.5% last April due to tariff hikes although so called core inflation slowed, according to the central bank.