May 11, 2018 / 4:04 PM / a year ago

EMERGING MARKETS-Argentina's peso slides again; central bank intervenes

    SAO PAULO/BUENOS AIRES, May 11 (Reuters) - Argentina's peso
tumbled to a record low against the dollar on Friday, causing
the central bank to intervene in the spot market for a second
straight day, as talks for an International Monetary Fund
financing line failed to calm traders.
    On Thursday, IMF Director Christine Lagarde said she
instructed her team to continue discussions regarding a
fund-supported program for Argentina following an extremely
rocky few weeks for the peso. Since March, the peso has slid
over 10 percent. In May alone, the currency has
registered intraday slides of over 5 percent and gains of over 2
    The Argentine government has hiked the benchmark interest
rate some 1,275 basis points in recent weeks and announced it
would seek a so-called "high access stand-by" agreement from the
IMF to stabilize the country's economy.
    While rhetoric has been sanguine, there are no concrete
commitments as of yet.
    The Argentine central bank intervened in the spot market for
the second consecutive day on Friday, but that did not stop the
peso's slide. The currency was trading down 4.18 percent in
afternoon trade.
    Investors "are continuing to unwind their positions (in
peso-denominated assets) to dollarize (their portfolios)," said
a Buenos Aires-based trader. "The central back had to sell
dollars once again, but they were absorbed by the market
immediately and the exchange rate didn't fall."
    Across Latin America, some other major markets saw their
currencies weaken over 1 percent as well.
    In Brazil, the real currency was trading down 1.31
percent against the dollar. Traders said they were adopting
defensive positions ahead of a new presidential election poll.
    "Markets are hoping for a candidate with a reformist vision
rising in the polls, which hasn't happened yet," wrote brokerage
Advanced Corretora in a report.
    In Mexico, the peso fell 1.02 percent after Mexican
Economy Minister Ildefonso Guajardo said the nation would not be
rushed into a poor North American Free Trade Agreement deal and
that plenty of issues with the negotiations were outstanding.
Key Latin American stock indexes and currencies at 1537 GMT:

 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets         1164.07      0.65     -0.16
 MSCI LatAm                    2869.76     -0.61       2.1
 Brazil Bovespa               85668.03     -0.22     12.13
 Mexico IPC                   46580.17      0.06     -5.62
 Chile IPSA                    5715.36      0.09      2.71
 Chile IGPA                   28887.86      0.24      3.24
 Argentina MerVal             29579.22     -0.07     -1.62
 Colombia IGBC                12378.52      0.16      8.86
 Venezuela IBC                19713.20      6.85   1460.65
 Currencies                              daily %     YTD %
                                          change    change
 Brazil real                    3.5933     -1.31     -7.79
 Mexico peso                   19.4185     -1.02      1.44
 Chile peso                      618.7      0.79     -0.65
 Colombia peso                 2827.61     -0.09      5.46
 Peru sol                        3.265      0.03     -0.86
 Argentina peso                23.7000     -4.18    -21.52
 Argentina peso                   23.7     -1.69    -18.86
 (Reporting by Gram Slattery in Sao Paulo and Walter Bianchi in
Buenos Aires; Editing by David Gregorio)
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