The bank hiked rates by three percentage points to 40%.

However, it failed to stem the fall in the peso, which has lost a quarter of its value over the past year.

Argentina is in the middle of a pro-market economic reform programme under President Mauricio Macri, who is seeking to reverse years of protectionism and high government spending under his Peronist predecessor, Cristina Fernandez de Kirchner.

Inflation, a perennial problem in Argentina, was at 25% in 2017, the highest rate in Latin America except for Venezuela.

This year, the central bank has set an inflation target of 15% and has said it will continue to act to enforce it.

Despite the twin rate rises, the peso, which was fixed by law at parity with the US dollar before Argentina's economic meltdown in 2001-02, is now trading at about 22,50 to the dollar.

Reuters