The peso is soaring after Argentina's central bank raises rates to 40%

Thomson Reuters

Argentina's President Macri waves as he arrives for the opening session of the 136th legislative term at the Congress in Buenos Aires

The Argentine peso jumped nearly 2.25% versus the dollar on Friday after the country's central bank raised interest rates to 40%.

The peso was trading up 2.25% to 21.7500 per dollar at 11:15 a.m. ET.

The Central Bank of Argentina has raised rates three times this week, with two of those times coming within the last 24 hours. The most recent hike pushed the benchmark interest rate up 675 basis points from 33.25%. Just a week ago, it was 27.25%.

The unusual and widely unexpected string of hikes comes as BCRA scrambles to prop up the Argentine peso, which is the worst-performing emerging market currency this year. The inflation rate in the country was nearly 25% in 2017.

The dollar is up 17.23% versus the peso this year.

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