Argentina's central bank cut its benchmark interest rate to 35% in a surprise move on Friday, boosting local markets and signaling growing optimism by the government that it can tame the country's triple-digit inflation.

Inflation has slowed further and is just a hair’s breadth from the Federal Reserve’s 2% target. The Personal Consumption Expenditures price index, which is the Fed’s preferred inflation gauge, showed prices rose 2.

Inflation edged up in September, nearing the Federal Reserve’s 2% target, according to a Commerce Department report Thursday. The personal consumption expenditures index increased 0.2% monthly and hit a 12-month rate of 2.