April 25, 2008 / 3:12 PM / 12 years ago

Argentine markets fall after econ minister's exit

(Recasts with informal peso trade, adds stocks)

BUENOS AIRES, April 25 (Reuters) - Argentine bonds slipped 1.2 percent in early trade on Friday, a day after Economy Minister Martin Lousteau resigned, while the peso dipped to its lowest level since early 2003.

Lousteau resigned from the Cabinet and was replaced by Carlos Fernandez, an economist who is seen as close to President Cristina Fernandez and her husband, ex-President Nestor Kirchner.

Traders had widely expected Lousteau’s exit, but it still caused jitters in opening deals.

“It isn’t good news since (Carlos) Fernandez is the type to give more power to (Domestic Commerce Secretary Guillermo) Moreno. The market would have liked someone more orthodox,” said one trader.

Moreno is the government’s price-control watchdog, and enforces price accords the government has used as its main weapon against inflation.

In informal trade between foreign exchange houses, as measured by Reuters, the peso ARSB= traded at 3.255/3.26 per dollar.

However, in formal interbank trade ARS=RASL it was stable at 3.1825/3.1850 after sagging 0.24 percent at the opening. The central bank regularly intervenes in the interbank market to keep the currency stable.

On the debt market <AR/BONOS>, Argentine bonds traded locally also slipped due to investor caution over Lousteau’s resignation. Hardest hit was the peso-denominated Discount paper, falling 2.8 percent.

Lousteau stepped down due to differences over how to handle soaring inflation, which has soured an economic boom in Latin America’s No. 3 economy.

Argentine stocks .MERV traded down 0.66 percent at 2,115.21 points at 12:10 a.m. (1510 GMT). (Reporting by Walter Bianchi and Jorge Otaola; Writing by Helen Popper; Jonathan Oatis)

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