Argentine peso firms with cenbank help, stocks fall

martes 3 de junio de 2008 18:05 ART
 

BUENOS AIRES, June 3 (Reuters) - Argentina's peso firmed on Tuesday to a 17-month high in interbank trade as the central bank worked to ease jitters over a prolonged farm strike, traders said, while stocks slipped and government bonds rose.

The peso strengthened 0.57 percent to close at 3.0675/3.0700 per dollar in formal, interbank trade ARS=RASL, after slumping to a low of 3.18 per dollar in early May.

The currency strengthened 0.16 percent to end at 3.1475/3.1500 per dollar in informal trade between foreign exchange houses, as measured by Reuters ARSB=, reaching a six-month high.

Farm leaders extended their strike over grains export taxes through the weekend. This is the third farm protest since March, when the government unveiled a new sliding-scale tax scheme linked to global grains prices.

The stubborn conflict has caused uncertainty in Argentina and was pressuring the peso lower until the central bank began flooding the market with dollars to reverse the trend.

Private investors are also selling dollars to cut their losses as the greenback continues to lose ground.

"The market continues to be somewhat out of whack because there's still a significant excess of dollars, a trend which is fueled by the central bank itself," a currency trader said.

"Many of us are wondering how far this drop (in the dollar) will go because (the central bank) keeps giving away foreign reserves," he added.

The bank's reserves have fallen by nearly $2 billion since hitting a record $50.5 billion in late March.   Continuación...