Argentine peso drops after sale of reserves
Argentina's peso currency traded 2.34pc weaker at 57.65 to the US dollar on Wednesday, cutting what had been steeper losses early in the day as the central bank sold $170m (€153m) of its reserves in three interventions aimed at controlling the peso's fall.
Worries about Argentina's ability to meet its dollar-denominated debt obligations have increased since the peso got trounced by political uncertainty after an Aug. 11 primary election. The peso has since lost 21.37pc of its value against the US dollar.
The central bank issued a press release saying it would limit financing in pesos for major exporters, a move aimed at strengthening the local currency by encouraging companies to sell dollars in order to obtain pesos needed to fund operations.
"Unfortunately, this measure is late. The run on the peso has already begun," tweeted Matias Rajnerman, an economist at consulting firm Ecolatina in Buenos Aires.
On Tuesday, Argentina's central bank exceeded for the first time a guideline on reserve sales agreed as part of its $57bn standby deal with the International Monetary Fund, selling $302m in the foreign exchange market.