The central bank said in a statement it had cut the overnight rate to 40% from 50% previously, the fifth major cut since brash economist Milei took office in December when the central bank changed the benchmark instrument.
The move came after the embattled South American country posted a monthly consumer price rise of 8.8%, still sky-high but down for the fourth straight month since a peak over 25% in December. It was also slightly below forecasts of a 9% rise.
Inflation in the 12 months through April landed at 289.4%, only slightly higher than the annualized rate a month earlier, the official INDEC statistics agency said.
Shopkeepers and consumers, however, said that although monthly inflation readings have slowed, the change has yet to be fully felt on the ground.
“No matter how much the inflation rate goes down, which is what everyone says, it is not reflected here because look, there are items that should have gone down but haven’t,” said Sandra Boluch, 50, a fruit and vegetable seller in Buenos Aires.
She said her store had been forced to raise workers’ salaries because their rents had increased, while input costs of things like plastic bags had gone up, all feeding back into the sticker price for carrots and apples.
“These (prices) increase a lot and then that’s reflected elsewhere. Where? In the merchandise,” she said. “Transportation is more expensive, diesel prices go up, everything goes up. So no matter how much we try to reduce prices, we can’t.”
The government of Milei, which inherited a major economic crisis, has touted its success lowering monthly inflation, which has dropped this year since a December peak after he took office and sharply devalued the local peso currency.