Argentine central bank intervenes heavily ahead of election, peso falls anyway
By Hugh Bronstein and Jorge Otaola
BUENOS AIRES, Oct 24 (Reuters) - Argentina's central bank sold $346 million of its reserves to ease the fall of the country's anemic peso on Thursday, three days ahead of a presidential election that has increased uncertainty over an economy already ailing from recession.
The peso ended the day 1.34% weaker at 59.80 per dollar.
President Mauricio Macri, an advocate of open markets who has failed to solve Argentina's long-standing economic problems, is expected to lose Sunday's vote to populist-leaning Peronist Alberto Fernandez. The peso has shed 84% of its value since Macri was inaugurated in late 2015.
"The central bank is intervening, basically trying to get to the election with a mixture of not losing too much in reserves while maintaining a foreign exchange rate that is not too restless," said local economist Martin Kalos.
With the economy shrinking and inflation running at 53.5%, opinion polls show Fernandez could win the presidency outright on Sunday, avoiding a November second-round vote.
His running mate is Cristina Fernandez de Kirchner, a populist icon who implemented heavy trade and currency controls during her 2001-2015 administrations. Business leaders and investors welcomed Macri's election four years ago, but his orthodox policies have not healed Latin America's No. 3 economy.
Consumer prices rose 5.9% in September alone.
Widely expected to be sworn in as Argentina's leader in December, Fernandez this week appealed to Macri to take measures to keep the currency stable during the likely upcoming transition of government. Fernandez's thumping of Macri in the August primary election set the peso tumbling.
Since the Aug. 11 primary, which in Argentina serves as a dress rehearsal for the general election, the central bank has spent more than $4.5 billion in reserves to prop up the peso, which has nonetheless lost 23.6% against the greenback during the same period.
(Reporting by Hugh Bronstein and Jorge Otaola; Additional reporting by Walter Bianchi, Gabriel Burin, Hernan Nessi, and Eliana Raszewski; Writing by Hugh Bronstein; Editing by Lisa Shumaker)
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