BUENOS AIRES, April 23 (Reuters) - Argentina's peso currency sank to its lowest level since early 2003 on Wednesday as investors bought dollars due to fears farmers might revive a strike against a tax hike on soy exports.
In informal trade between foreign exchange houses, as measured by Reuters, the peso ARSB= sagged 0.46 percent to close at 3.2425/3.2450 per dollar. So far this month, it has weakened by 1.77 percent.
However, in formal interbank trade ARS=RASL the peso held steady at 3.1800/3.1825 as the central bank sold dollars to stabilize the currency, traders said.
"The price of the dollar has gone up ... as a result of the uncertainty in the market caused by the negotiations between the farmers and the government," the Puente Hermanos brokerage said in a daily report.
Argentine farmers staged a three-week strike in March, causing food shortages and a major political crisis.
They agreed to end the strike and spend April in talks with the government, but leaders have expressed frustration with the negotiations and some have threatened to resume protests if their demands are not met.
On the debt market, Argentine bonds <AR/BONOS> traded locally recovered slightly after two sessions of pronounced losses, ending the day with an average gain of 0.3 percent.
The dollar-denominated Bonar X ARBONAR17D=RASL rose 1.1 percent in over-the-counter trade, while Par paper in pesos fell 1.2 percent ARPARP=RASL.
The benchmark MerVal stock index .MERV dropped 0.3 percent to close at 2,140.42, affected by the political uncertainty at home and losses in bourses abroad, traders said.
Among the biggest losers was paper producer and sugar refiner Ledesma LED.BA, whose stock fell 2.17 percent to 4.96 pesos per share.
On the broad market, volume was strong at $87 million. Of active shares 24 advanced, 40 declined and 19 were unchanged. (Reporting by Jorge Otaola and Walter Bianchi; Writing by Helen Popper; Editing by Leslie Adler)