BUENOS AIRES, March 11 (Reuters) - Argentina’s peso gained 3.2 percent against the dollar on Friday as institutional investors offloaded greenbacks, attracted by high interest rates on short-term, peso-denominated central bank notes, traders said.
The market closed at 14.83 pesos per dollar, the peso’s strongest level since mid-February.
“The trend in favor of the peso is down to the pressure generated by the high interest rates on central bank notes,” said Fernando Izzo, a broker at exchange house ABC.
The central bank is issuing 35-day notes with an interest rate of 38 percent in order to drain pesos from the money market as it battles an inflation rate estimated to be above 30 percent.
The bank raised the rate on its 35-day paper this month after the official peso rate hit a record low of 16.00 on March 1. (Reporting by Jorge Otaola; Writing by Richard Lough; Editing by Matthew Lewis)