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. Last Updated: 07/27/2016

Argentina's Currency Climbs, Buoyed by Recent IMF Deal

BUENOS AIRES, Argentina -- Argentina's peso firmed to nine-month highs Tuesday in razor-thin trade as exporters sold part of their dollar revenues as required by law amid scant demand for the greenback, traders said.

The peso firmed to 3.10/3.11 per dollar for large-scale transactions on the foreign exchange market, up 2.57 percent from Monday's close at 3.18/3.19. However, the peso is still around 70 percent weaker against the dollar since its devaluation in January 2002.

The government has said it wants to have a stable peso to help consolidate relative economic stability after the political and financial chaos of last year, which sent the peso careening to a low of 4 to the dollar.

"The supply of dollars stemming from the exporter sales is exceeding demand, so the peso is firmer," said one foreign exchange dealer. "The only major buyer in the market is the Central Bank."

Many traders expect the government to bring in new foreign exchange measures to boost the purchase of dollars.

Laws forcing exporters to sell a part of their dollar revenues on the market were introduced last year to help stop the slide of the currency and have since been partially relaxed.

The peso has strengthened 8.33 percent so far this year. However, some analysts expect it to retreat to between 3.30 and 3.40 per dollar.

The peso has brushed consecutive highs against the dollar in recent weeks and was buoyed by last week's short-term debt deal for a $6.6 billion loan from the International Monetary Fund to cover the country's repayments to the fund until the end of August, which analysts say should give Argentina a lifeline as it struggles to end its worst-ever financial crisis.

The World Bank will assist Argentina with $1 billion as long as Buenos Aires clinches a debt rollover deal with the IMF, the bank's president said Monday.