UPDATE 2-Argentine peso hits six-year low, stocks plunge

viernes 24 de octubre de 2008 17:27 ARST
 

(Adds peso close, updates prices)

BUENOS AIRES Oct 24 (Reuters) - Argentina's peso currency closed at its weakest level in six years against the dollar on Friday and the benchmark stock index faded more than 7 percent in afternoon trade.

Fears of a global recession, as well as a crisis in confidence over the Argentine government's economic policies, have relentlessly hammered the country's markets all week after the government announced a state takeover of the private pension system.

The peso weakened 0.77 percent in formal interbank trade to 3.2775/3.2800 per dollar ARS=RASL, its lowest level since the January 2002 devaluation.

In informal trade between foreign exchange houses, as measured by Reuters ARSB=, the currency sank 2.38 percent to 3.4250/3.4350 per dollar, the lowest since December 2002.

The MerVal index of leading stocks .MERV was off 7.1 percent at 894 points in heavy volume, accumulating a loss of more than 26 percent during the week. The index is at levels unseen in 4-1/2 years.

Molinos food company launched a repurchase offer for 20.7 percent of its market capital, offering to buy 51.8 million shares at 9 pesos per share MOL.BA after the Argentine securities regulator relaxed restrictions on companies buying back shares.

Molinos was trading at 7.7 pesos per share.

Sovereign bonds traded over the counter in Buenos Aires closed down an average 2.4 percent, their eighth consecutive session of losses.   Continuación...