January 7, 2010 / 3:06 PM / 11 years ago

Argentine markets fall on central bank turmoil

BUENOS AIRES, Jan 7 (Reuters) - Argentine financial markets fell in early trade on Thursday, hit for a second day by tension between the president and the central bank chief over using foreign currency reserves to pay debt.

The benchmark MerVal .MERV stocks index was down 1.04 percent to 2,337.7 points a day after President Cristina Fernandez asked Central Bank President Martin Redrado to resign. For details, see [ID:N07183139]

Government bonds trading over the counter in Buenos Aires also lost ground for a second consecutive session, opening down by an average 0.3 percent. Among the biggest early losers was dollar-denominated Boden 12 paper ARBODEN12D=RASL, sliding 1.5 percent.

Fernandez asked Redrado to step down Wednesday after he blocked her order to use $6.6 billion in foreign currency reserves to repay debt. He refused to step down, saying only Congress can remove him.

On the foreign exchange market, the peso was down 0.13 percent at 3.8750/3.8800 per U.S. dollar ARSB= in informal trade between foreign exchange houses, as measured by Reuters.

In formal interbank trade, the peso opened flat at 3.8100/3.8125 per dollar ARS=RASL. (Reporting by Jorge Otaola; writing by Luis Andres Henao; editing by Jeffrey Benkoe)

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