The local currency strengthened 1.31 percent on news of the central bank's surprise announcement to 20.65 per US dollar.
Earlier, the peso had slumped 1.63 percent to an all-time low 20.89 to the greenback, traders said, despite massive central bank dollar sales on Wednesday and Thursday designed to stop the currency from further weakening.
The bank sold $853.3 million in the foreign exchange market on Thursday. The day before it sold $1.472 billion on the local spot market, its largest intervention in currency markets in at least 15 years.
Central bank chief Federico Sturzenegger said this month that policymakers would wait to evaluate May inflation before deciding on an interest rate change.
Argentina has a 2018 inflation target of 15 percent.
"Inflation has to fall a lot beginning in May" to meet the target Sturzenegger said on April 16. "If that scenario does not play out, we have to do what we have to do, which in this case is raise the interest rate," he said.