Bloomberg News

Argentine Peso Falls Most in Six Months as Farmers Halt Sales

June 06, 2012

Argentina’s peso fell the most in six months as the nation’s farmers halted sales of grains and livestock in opposition to a tax increase on rural property in Buenos Aires.

The peso fell 0.3 percent to 4.4915 pesos per dollar at 2 p.m. in New York, the biggest decline since Nov. 29. The currency has dropped 1.4 percent in the past 30 days, the sharpest monthly slide since March 2009.

The central bank is allowing the pace of the peso’s controlled slide to quicken as the farmer protests curb the inflow of dollars into the world’s second-largest corn exporter. The strike, slated to halt sales from today through June 12, adds to pressure on the peso after the government’s tightening of currency purchase restrictions heightened capital flight from Argentines seeking to protect their money from annual inflation that economists say tops 20 percent.

“There’s a market pressure to devalue more,” said Fernando Izzo, a currency trader with ABC Mercado de Cambio in Buenos Aires. “The volume in the currency market has dropped because there are fewer dollars and the farmers are selling less, so the central bank is letting it weaken.”

To contact the reporter on this story: Katia Porzecanski in New York at kporzecansk1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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