Argentina’s peso extends rally as central bank frets
The value of the currency has risen 11.2% so far in October but it is still down about 50% since the start of the year
Buenos Aires — Argentina’s currency extended its week-long rally on Tuesday and investors swarmed over peso-denominated debt offered by the central bank at nose-bleed-high interest rates, even as economists voiced concern over the bank’s growing indebtedness. The central bank began offering short-term notes called “Leliqs” with interest rates of about 70% at the start of the month to encourage Argentinian banks to invest in peso-denominated assets rather than seeking the safety of the US dollar. The strong dollar has fueled soaring inflation in Latin America’s third-biggest economy. The currency closed 1.24% stronger at 37.14 pesos to the greenback on Tuesday. The value of the currency has risen 11.2% so far in October. But it is still down about 50% since the start of the year, with private analysts forecasting further peso devaluation ahead. Economists are concerned over the high rates carried by the notes and see the issuance of the new Leliqs as a risky maneuver that could backf...
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