The Argentine Peso surged Tuesday as Wall Street traders were heartened by President Mauricio Macri's capital control policies. The policy aims to protect the peso exchange rate.
Traders said the peso closed 5.39% higher against the dollar at 55.98 pesos, its strongest level in a week and approached a record closing low on Friday. Argentina's Country Risk also fell after soaring last month to its highest level in more than a decade.
Traders said the central bank intervened in the afternoon, using foreign exchange reserves to sell dollars to support the peso. The Argentine central bank did not comment. The central bank has intervened in the market in the past, selling nearly $500 million in the second half of last week alone.
The rebound of the peso brought some comfort to Markley. His defeat in last month's presidential primaries hit the country's bonds, stocks and pesos, which depreciated by about 26% against the dollar in August.
However, Argentina's S& P Merval index suffered a setback in the afternoon, eventually closing down 11.9% to a two-year low. Local analysts attributed the decline to Global trade concerns.
"All markets have fallen. In a fragile country like Argentina, the political situation is more complex and the damage is more severe," said Hector Scasserra, head of Arpenta Sociedad de Bolsa, a local brokerage.
In Europe, the blow to Argentine bonds eased after falling to record lows on Monday, with some banks trading in overseas markets even experimenting with gains.
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