Crawling peg to slow to 1 beginning next month
Decision could prolong recent market rally, say investors
Announcement follows data showing annual inflation slowed in December
Central bank sees inflation decreasing further
Annual inflation rate has slowed from April peak near 300

BUENOS AIRES, Reuters Argentina39;s central bank will slow the rate of the local peso39;s devaluation, it said on Tuesday, after new data showed annual inflation slowing in December and as the central bank sees continued progress on inflation.

Beginning in February, the rate, known as the crawling peg, will slow to 1 per month from a prior rate of 2 due to the consolidation observed in the inflationary trajectory during the last few months, and in the expectations of a decrease in inflation, the central bank said in a statement.

Investors say the slower crawling peg for the peso could prolong a market rally that has been fueled by the promarket policies of President Javier Milei and hopes for fresh IMF funds.

Milei, who took office in December 2023, has launched a nationwide austerity push, slashing many public budgets. While poverty rates have increased, price rises have steadily slowed down from eyepopping doubledigit increases each month.

The central bank39;s announcement came about an hour after official data showed that monthly inflation ticked up a tad in December, though the annual rate slowed further as Milei pushed tough spending cuts and austerity measures.

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