UPDATE 2-Argentina debt deal should limit need for more controls, reduce peso gap- cenbank chief

(Adds black market peso rate, more info from cenbank chief comments)

BUENOS AIRES, Aug 25 (Reuters) - Argentina’s recent debt restructuring deal with creditors should tame the need for further currency controls and help reduce the wide gap between the official exchange rate and the black market peso, the central bank chief said on Tuesday.

The peso’s current exchange rate, which has been propped up by currency controls since last year, is considered “competitive,” central bank president Miguel Angel Pesce said, at a virtual conference for the Argentine Institute of Finance Executives.

The peso opened 0.11% weaker at 73.81 to the U.S. dollar after Pesce’s comments, traders said. The black market peso traded at 137 per dollar, stretching the gap between the rates to 85.81%.

Argentina struck a preliminary deal with its creditors earlier this month for the restructuring of some $65 billion in foreign debt. Bondholders have until Aug. 28 to formally accept the offer, though major creditor groups have already said they support the proposal.

The previous administration of President Mauricio Macri implemented currency controls in September in an effort to tame speculation and stem a spiraling debt crisis. President Alberto Fernandez, who took power in December, has maintained the controls as the battered economy faces a grim outlook under the weight of the coronavirus pandemic.

Pesce said the debt deal should improve market expectations, tamping down the need for further controls.

“What we are waiting for is an improvement in expectations. If this improvement in expectations occurs, we would find no reason to have to establish greater restrictions on the exchange market,” he said.

Argentina’s inflation rate is also expected to continue decelerating in 2021, Pesce added. Argentina consumer prices rose 2.2% in June, compared to the previous month, the national statistics agency said in its most recent data. Twelve-month inflation in June was 42.8%. (Reporting by Eliana Raszewski; writing by Cassandra Garrison; Editing by Paul Simao and Alistair Bell)