Nov. 3 (Bloomberg) -- Argentine bonds advanced on speculation the government will buy back securities that have slid to record lows amid concern the nation will default for the second time this decade.

Argentine officials are considering repurchasing some $3 billion of floating-rate bonds maturing in 2012, known as Bodens, newspaper Cronista reported today, without saying how it obtained the information. An Economy Ministry spokesman didn't return a phone call by Bloomberg News seeking comment.

The price on Bodens maturing in 2012 jumped to 19.75 cents on the dollar at 2:37 p.m. New York time, from 18.50 cents on Oct. 31, according to JPMorgan Chase & Co.

``Demand from more aggressive investors who want to bet on a recovery began to emerge last week,'' said Noelia Lucini, a portfolio manager with Buenos Aires-based Capital Markets Argentina.

The Bodens due in 2012 plunged to a record low of 10 cents on Oct. 21, the day President Cristina Fernandez de Kirchner announced a plan to nationalize 10 private pension funds. Argentine bonds have fallen far enough that they look cheap because they'd likely pay back more than their current prices even if the government were to default, Credit Suisse said last week.

Many investors say the pension nationalization plan is an attempt to seize the funds' $26 billion in a bid to avert default. Fernandez has denied the move is a bid to ``grab the cash,'' saying she's looking to protect pensioners from the rout in global financial markets. Congress began debating the bill last week and may begin to vote on it this week.

`Calm Day'

Argentina's peso was little changed at 3.3855 per dollar, from 3.3865 on Oct. 31. The central bank bought pesos to shore it up, according to traders including Francisco Diaz Mayer at Buenos Aires-based ABC Mercado de Cambio.

``It's been a calm day,'' Diaz Mayer said.

A central bank spokesman declined to comment on whether the bank intervened in the foreign exchange market today. Argentina's foreign reserves dropped more than $1 billion last week to $45.5 billion as the central bank bought pesos with dollars in the currency market.

Trading was slow today in part because of a central bank rule change that Gustavo Quintana, a currency trader with Buenos Aires-based Lopez Leon Brokers, said seeks to curb capital outflows. The change affects investors who try to move cash out of the country by buying stocks and bonds in the local market and then selling them abroad for dollars. The central bank increased the wait period on such transactions to three days.

Chile, Peru, Venezuela

``Before you could sell them within 24 to 48 hours,'' Quintana said. ``This change will probably reduce volumes in coming days.''

Chile's peso climbed today as demand for higher-yielding, emerging-market securities picked up. The peso rose 1.1 percent to 663.24 per dollar from 670.75 at the end of last week.

The yield on a basket of five-year Chilean peso bonds in inflation-linked currency units declined 1 basis point, or 0.01 percentage point, to 3.29 percent, according to Bloomberg composite prices.

Peru's sol strengthened 0.2 percent to 3.07 per dollar, compared with 3.075 last week, according to the central bank, which said it sold $14 million to help shore up the sol.

Venezuela's bolivar weakened 2.7 percent to 5.35 per dollar in unregulated trading, from 5.20 on Oct. 31, said Henry Travieso, a trader at Banfers Sociedad de Corretaje in Caracas. The government pegs the currency at an official exchange rate of 2.15 per dollar under restrictions imposed in 2003.

Venezuelans turn to the parallel market when they can't get government approval to buy dollars at the official rate. The government is coming under increasing pressure to devalue the bolivar ``especially since the price of oil has fallen so much,'' Travieso said. Oil, Venezuela's biggest export, has tumbled 57 percent from a record high reached on July 11 to $63.88 a barrel.

Markets were closed in Colombia for a national holiday.

To contact the reporters on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.netDrew Benson in Buenos Aires at abenson9@bloomberg.net

Last Updated: November 3, 2008 15:23 EST