Argentine peso halts slide, closes up more than 4%

[BUENOS AIRES] Argentina's peso halted its slide Thursday, closing up more than 4 per cent following three days of sharp declines as President Mauricio Macri grappled with a crushing political defeat.

The rebound, which left the peso at 59.72 to the dollar, came after both Mr Macri and the centre-left opposition candidate who trounced him in Sunday's primaries, Alberto Fernandez, called for calm.

The peso had slipped to 62.18 to the dollar at the close on Wednesday having closed at 46.55 on Friday.

Buenos Aires' Stock Exchange rose 3.74 per cent, after rebounding 10 per cent on Tuesday, clawing back some of Monday's losses when it plummeted 38 per cent as the markets reacted to the news of Mr Macri's shock poll defeat.

Mr Fernandez, now the favorite to unseat Mr Macri in October's presidential election, said his economic policy did not contemplate a debt default.

On Thursday, Mr Fernandez said he considered an exchange rate of 60 pesos to the dollar as "reasonable" and said it should no longer fluctuate wildly.

Mr Macri suffered a resounding defeat in Sunday's nationwide primaries, signalling a loss of public confidence in his IMF-backed (International Monetary Fund) austerity measures with just months to go before October presidential elections.

Centre-right Mr Macri polled just 32 per cent of the total votes cast compared to Peronist candidate Mr Fernandez's 47 per cent, leaving the centre-left candidate as the overwhelming favorite in the race.

The results sent the currency and stock markets tumbling on Monday, with the peso losing more than a quarter of its value over three days.

As the Buenos Aires stock exchange reeled, on Wall Street shares in Argentine companies plummeted more than 50 per cent and Argentine bonds were down 20 per cent.

Mr Macri reacted on Wednesday by announcing salary hikes and tax cuts to win back voters while calling for "dialogue" with the opposition to "convey peace of mind in this electoral process".

Mr Macri later tweeted that he and Mr Fernandez met and pledged to work together to ensure the economy is affected "as little as possible".

Mr Fernandez assured markets and voters that his election as president would "not imply the risk of default, it implies a different operating logic".

Argentina defaulted on its debt in 2001 during the worst economic crisis in its history.

The country is currently in a recession and posted 22 per cent inflation for the first half of the year - one of the highest rates in the world.

Poverty affects 32 per cent of the population.

AFP