Argentine peso closes at record low against US dollar

BUENOS AIRES: Argentina's peso closed at a record low against the U.S. dollar on Wednesday as concerns about inflation, weak growth and October's presidential election bit into market confidence in Latin America's No. 3 economy.

The peso weakened 2.85 percent to close at an all-time low of 43.90 per dollar, traders said.

The peso, which lost half its value against the greenback last year, has been one of the world's worst-performing currencies in 2019, losing 14 percent since the beginning of the year. It has tumbled more than 10 percent this month alone.

The weakness has raised fears of a repeat of 2018, when investors dumped the currency amid what Argentine President Mauricio Macri called a year of economic "storms."

After a stronger start this year, investors have been rattled by stubborn inflation, with consumer prices rising at a rate of more than 50 percent per year, while benchmark interest rates gallop along at over 66 percent.

The peso closed on Tuesday at 42.65 to the dollar, which was a record low before Wednesday's close. It has weakened steadily since the middle of last month.

Argentina's central bank and Treasury have signaled a more hawkish stance over the last month, looking to tighten monetary policy in order to tame inflation and protect the peso, which analysts said should limit the recent weakness.

Macri was forced by the tumbling peso last year to negotiate a $56.3 billion standby financing deal with the International Monetary Fund. The agreement requires his government to erase its primary fiscal deficit. His politically painful utility subsidy cuts are part of that fiscal effort.

Argentina will hold general elections on Oct. 27.

Latin American currencies, including Brazil's real, fell more broadly on Wednesday. South Africa's rand also slumped as sentiment toward emerging market currencies was soured by a slide in the Turkish lira.