By Eliana Raszewski

BUENOS AIRES Argentina's central bank board will discuss the possibility of hiking the benchmark interest rate from its current 118% at its meeting later this week, a source with knowledge of the matter said on Monday, as officials battle to tamp down on triple-digit inflation.

Latin America's third-largest economy saw annual inflation top 124% in August, a 32-year high.

"A decision has not been taken yet," the source, who spoke on the condition of anonymity, told Reuters. "There are those who want to hold (the rate) and those who want to raise (it)," the source added.

Argentina's central bank board meets every Thursday, though monetary policy decisions can be made at any time.

An increased interest rate could encourage Argentines to leave their savings in pesos and relieve pressure on the local currency less than two weeks before the country's presidential elections.

The Argentine peso weakened to 945 per U.S. dollar on the parallel black market on Monday, a nearly 7% drop from Friday’s closing price.

(Reporting by Eliana Raszewski; Editing by Isabel Woodford and Sarah Morland)