Argentina central bank aids peso; bonds fall again

miércoles 29 de octubre de 2008 18:51 ARST

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BUENOS AIRES Oct 29 (Reuters) - Argentina's peso closed steady on Wednesday due to a massive central bank dollar sale, but bonds fell for an 11th consecutive session due to continued concerns over a government plan to take over private pensions.

Stocks got a boost, though, as local private pension funds sold Brazil-listed shares of Petrobras energy firm (PETR4.SA: Cotización) to buy Buenos Aires-listed shares of the same company (APBR.BA: Cotización) to comply with government orders to sell their foreign assets.

Traders said the central bank sold about $400 million in dollars on the foreign exchange market after offering to sell as much as $1 billion when the peso opened weaker, extending a slide to six-year lows. But an official source, who asked not to be named, said the amount sold was $165 million.

"The dollar offer managed to turn around the rise in the dollar price, although almost without trades because just the idea that the Central (Bank) is willing to to do anything changed the mood of the market," said a trader, who asked not to be named.

In formal trade between banks the peso ended flat at 3.3675/3.3700 per dollar ARS=RASL, after weakening to 3.41 in early trade.

Businesses and individuals are continuing to demand dollars, which are seen as a safe haven in Argentina, where markets have been tremendously volatile this month.

The peso has remained under pressure due to investor concern over a government bid to take over private pension funds and more general jitters over the Argentine economy. The government has asked the funds to stop selling pesos and sovereign debt.

In informal trade between foreign exchange houses, as measured by Reuters, the peso closed down 0.58 percent at 3.4600/3.4700 ARSB=.   Continuación...