UPDATE 2-Argentina central bank chief quits, raising policy uncertainties
(Recasts lead to add replacement considered sympathetic to interventionist stance; adds market reaction, analyst quotes, context)
By Jorge Otaola and Nicolás Misculin
BUENOS AIRES Oct 1 (Reuters) - Argentina's central bank chief resigned on Wednesday after a long tussle with the Economy Ministry and was replaced with a regulator considered sympathetic to the interventionist stance of a government battling one of the world's highest inflation rates.
The move drew a sharp negative reaction in financial markets, with the price of Argentina's local U.S. dollar-denominated bonds skidding.
The resignation of Juan Carlos Fabrega as head of the central bank followed a long tussle with the Economy Ministry over whether policymaking should focus on taming inflation or bolstering growth in Argentina's stagnating economy. The government has also been grappling with shrinking foreign reserves after another debt default in July.
Alejandro Vanoli, head of the country's markets regulator, will take over as the central bank chief, a spokesman for President Cristina Fernandez said.
Fernandez has scaled up state interventions in Latin America's No. 3 economy since the July default, battering investor confidence and intensifying capital flight.
"Fabrega handed in his resignation this afternoon in a way that was impossible to decline," a source at the central bank told Reuters.
Argentina's local U.S. dollar-denominated bonds shed around two points on the news, with the Bonar 2017s sliding from around 88.40 to 86.75 and the Boden 2015s dropping from 91.75 to 90.0, according to brokers. Continuación...