The Central Bank (BCRA) kept its policy rate on hold at 40% yesterday, after three emergency hikes previously to counter a currency sell-off (see WERO 9 May 2018). The BCRA monetary policy committee stated that the rate “must be maintained at high levels to contain the pass-through of the currency depreciation to domestic prices.” In 2018 YTD the ARS has lost more than a quarter of its value against the USD. In the first two weeks of May, it depreciated by -16%. Yet it appears to have stabilized since, at below ARS25 per USD, the floor set by the BCRA. One-week historical volatility has moderated to 12%, down from a high of 65%. Is the worst behind Argentina? This tranquility is conditional on (i) the outcome of negotiation with the IMF on a USD30bn stand-by agreement and (ii) the announcement of new fiscal consolidation measures. What we already know is that a tighter fiscal stance and financial conditions as well as policy uncertainty should slow down Argentina’s cyclical momentum.