Argentina battles to shore up peso

Argentina's central bank announced on Friday a package of measures to ease pressure on the peso – including the third rate hike in a week.

The move comes after the currency – which has been battling against the dollar since the start of the year – plunged to a record low on Thursday.

In a statement, the bank said it had raised its policy rate 675 basis points to 40% after two successive hikes of 300bp. It also changed its overnight and seven-day rates.

In addition, central bank authorities have told banks that no more than 10% of their equity can be held in US dollars.

"The monetary authority took these decisions with the aim of avoiding disruptive behavior in the exchange market as well as to guarantee the disinflation process, and it is ready to act again if necessary," it said in a statement.

The central bank has used about US$5bn of the country's foreign reserves to shore up the local currency. And it could continue using this tactic, according to the statement: "As well as using interest rates, the central bank will continue operating with all its exchange market intervention tools."

The government, meanwhile, has maintained its annual inflation target of 15% for this year.