April 25, 2008 / 4:07 PM / 12 years ago

Argentina markets hit by economy minister's exit

(Updates with closing prices)

BUENOS AIRES, April 25 (Reuters) - Argentine bonds closed down 3.2 percent on average on Friday, a day after Economy Minister Martin Lousteau resigned, while the peso languished at its lowest level since January 2003 in informal trade.

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, former President Nestor Kirchner.

Traders had widely expected Lousteau’s exit, but it still weighed on markets, which have been jumpy for days due to increasingly tense talks between the government and farmers, who staged a three-week strike last month.

“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, who enforces the price accords the government has used as a key weapon against inflation.

Argentine stocks .MERV ended down 1.31 percent at 2,101.40 points.

In informal trade between foreign exchange houses, as measured by Reuters, the peso ARSB= slipped 0.08 percent to close at 3.2500/3.2525 per dollar after trading as weak as 3.2650/3.2700 earlier in the session.

In formal interbank trade ARS=RASL the central bank sold off dollars to shore up the peso, and the currency ended 0.31 percent stronger at 3.1725/3.1750 per dollar after sagging 0.24 percent at the opening.

On the debt market <AR/BONOS>, Argentine bonds traded locally tanked on investor caution over Lousteau’s resignation. Hardest hit was the peso-denominated Discount paper, which shed 6.7 percent.

“The new minister is more of the same thing we’re used to from this government, which confirms the downward trend of bonds,” a trader said.

Lousteau stepped down due to reported differences over how to handle soaring inflation, which has soured an economic boom in Latin America’s No. 3 economy. (Reporting by Walter Bianchi and Jorge Otaola; Writing by Helen Popper; editing by Gary Crosse)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below