Argentina's black-market peso slides past 9 per dollar

BUENOS AIRES, April 25 Thu Apr 25, 2013 12:21pm EDT

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BUENOS AIRES, April 25 (Reuters) - Argentina's black-market peso slid past 9 per dollar on Thursday in minimal trade volume, reflecting steady private demand for greenbacks amid a virtual ban on foreign currency purchases.

The spread between the black-market rate and the official exchange rate widened to 75 percent. Economists say investors are putting off projects due to the financial uncertainty.

In midday trade, the black-market peso slumped 1.9 percent to a bid price of 9.08 per dollar, according to Reuters data. This contrasted with the official interbank exchange rate, which remained unchanged at 5.1725 per dollar.

Traders said business was practically frozen due to rumors that tax agency officials were monitoring the black market.

Inflation of roughly 25 percent a year and mounting fears that the peso could start depreciating at a faster rate have spurred Argentines to seek refuge in dollars. The country has a long history of devaluations and economic crises.

Soon after President Cristina Fernandez won re-election in 2011, her government imposed limits on foreign currency purchases to stem capital flight. The controls were tightened and savers cannot buy dollars at the official rate.

Latin America's No. 3 economy grew 1.9 percent last year versus 8.9 percent in 2011.

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