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Argentina’s central bank intervened in the currency market for the first time since controls were removed after the peso touched a record low.
The Argentine peso closed at 15.06 pesos per dollar after falling to an all-time low of 15.15 pesos per dollar earlier Thursday, according to prices from the MAE electronic trading platform. The central bank sold $41.3 million in the currency market, according to an e-mailed statement. With the slide, the peso has fallen 13 percent this year, the most among 24 emerging-market currencies tracked by Bloomberg.
"The intervention is sending a signal that these are the levels the government will tolerate,” said Gustavo Quintana, a currency trader at PR Corredores de Cambio in Buenos Aires. "The market will probably adapt to this. The peso had trouble depreciating further after the central bank intervention.”
President Mauricio Macri removed currency controls Dec. 17 as part of an effort to promote international investment and win access to global capital markets. The peso fell 27 percent on the day currency controls were removed. Finance Minister Alfonso Prat-Gay said at the time that the central bank would intervene in currency markets should declines in the peso spiral out of control. Since obtaining a $5 billion loan from a group of banks on Jan. 29, Argentina’s reserves have fallen 2.5 percent to $29.3 billion.
The new administration’s lack of intervention in currency markets so far was an abrupt change from the central bank under the leadership of former chief Alejandro Vanoli, who routinely drew on the nation’s reserves to maintain a crawling peg and bolster the peso ahead of presidential elections.