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Argentina’s central bank will begin seeking to control inflation through a new overnight rate to be introduced in coming months, according to two people familiar with the plans.

Policy makers, who currently use weekly bond auctions to manage monetary policy, aim to set the new overnight lending rate for banks on a monthly basis, in line with the practices of central banks around the world, said the people, who asked not to be identified because they aren’t authorized to speak publicly about the plans.

Argentina is seeking to normalize its financial system under President Mauricio Macri, who took office in December after campaigning on a pledge to ignite economic growth by easing rules that hurt business and luring foreign investment. Under the previous government, Argentina had sought to control inflation with currency controls. Since December, the bank’s 35-day notes known as Lebacs were used as a benchmark.

The overnight rate decisions will come out once a month or once every 15 days, one of the people said. Lebac sales, which take place once a week, will remain as a tool for liability management.

Regional Standard

Brazil’s overnight rate currently sits at 14.25 percent while Colombia’s is 7.75 percent, Mexico and Peru have set their benchmarks at 4.25 percent and Chile is at 3.5 percent. By comparison, Argentina’s 35-day Lebac rate is currently 30 percent. The central bank raised rates to as high as 38 percent during Macri’s first month in office as part of its battle to slow annual inflation.

While price increases soared to about 47 percent in June, Sturzenegger has said that inflation is slowing and will end the year lower. The bank will auction the securities today after cutting the yield on them to 30 percent last week.

The central bank press office declined to comment and pointed to a statement by central bank President Federico Sturzenegger, who first said in a July news conference that the bank was assessing the use of a reference rate.

Local newspaper Ambito reported last week that the bank may announce the changes in September.

Consumer prices rose 3.1 percent in June from the previous month, exceeding the 2.8 percent median forecast from analysts surveyed by Bloomberg. That was just the second reading from an index released by Macri’s administration in April as part of an effort to restore trust in Argentina’s economic statistics after years of alleged manipulation of official data. National inflation will probably slow to about 2 percent in July, Finance Minister Alfonso Prat-Gay said on Monday.

( Updates with Lebac rate trend in fifth paragraph. )