Argentine peso, bonds slip as farm strike drags on

jueves 27 de marzo de 2008 18:24 ART

(Updates with closing prices)

BUENOS AIRES, March 27 (Reuters) - Argentine bonds slipped in cautious trade and the peso slid to a fresh five-month low in informal trade on Thursday, as a prolonged protest by farmers dried up dollar flows and worried investors.

Stocks rose slightly in thin trade and the central bank sold dollars on the formal interbank foreign exchange market, where it regularly intervenes, lifting the peso after three straight sessions of losses.

In informal trade between foreign exchange houses, as measured by Reuters, the peso ARSB= weakened 0.16 percent to 3.1950/3.1975 per dollar, a level not seen since October.

The peso strengthened by the same amount to 3.1625/3.1650 ARS=RASL in formal interbank trade.

"Dollar demand remains present, but the traditional offer from (agricultural) exports is nil," said a trader at ABC Market Exchange.

A deadlock between the government and farmers over a tax hike on soy exports entered its third week on Thursday.

Farmers have stopped moving goods to market and, with grains and livestock exchanges frozen, traditional agricultural dollar inflows have been cut.

Analysts said the central bank has plenty of room to maneuver and control the peso, since foreign reserves are hovering near a historic high of more than $50 billion.   Continuación...