Argentina’s Central Bank hiked its benchmark interest rate by six percentage points on Monday, to 97%, in a bid to combat surging inflation, which has hit 30-year highs.

Central banks worldwide are fighting to keep inflation under control, but Argentina’s annual inflation rate climbed past 100% last month.

According to International Monetary Fund data, this is the highest level since the early 1990s, and Venezuela and Zimbabwe are presently the only two nations experiencing greater inflation than Argentina. For comparison, in the United States, where the central bank has hiked key interest rates by five percentage points in the last 14 months, inflation is hovering at 5.5%.

Argentina’s central bank also hopes that the rate rise would encourage investment in the country’s currency, according to a statement issued on Monday. Exorbitant inflation caused huge withdrawals of Argentine peso assets, resulting in a 23% fall in its value versus the US dollar this year.

The central bank also stated in a statement on Monday that it hopes the rate rise will encourage investments in the country’s currency.

Exorbitant inflation caused huge withdrawals of Argentine peso assets, resulting in a 23% fall in its value versus the US dollar this year. Analysts believe that the recent rate rise will have little impact on Argentinian markets.

Economy Minister Sergio Massa is focused on averting further currency depreciation and regulating inflation ahead of the October presidential election. Since current President Alberto Fernandez stated last month that he will not seek re-election, Massa has been viewed as a prospective third-party candidate, and his success is likely to be linked to the outcome of this inflation-fighting strategy.

Miguel Kiguel, a financial adviser and former deputy manager at the Central Bank of Argentina, feels that the government is completely losing it against inflation. He is fearful that the government has started very late.

“Of course, interest rate hikes are the primary strategy for combating inflation, but they take time,” he added. When a central bank boosts interest rates, the impacts are felt two or three months later, which is ineffective in Argentina’s scenario.”