October 18, 2018 / 6:43 PM / 10 months ago

Argentina peso weakens for second day in a row

BUENOS AIRES, Oct 18 (Reuters) - Argentina’s peso closed slightly weaker on Thursday after the central bank sold another round of short-term debt with high interest rates.

The peso was down 1.12 percent at 36.65 per U.S. dollar, traders said. It has fallen 1.77 percent in the last two days. So far in 2018, the peso has depreciated 49.11 percent.

Earlier on Thursday, the central bank sold 152.373 billion pesos ($4.17 billion) in seven-day Leliq notes with an annual interest rate of 72.537 percent, according to traders.

The Leliq debt auctions are intended to sop up liquidity in the peso spot market that would otherwise be used to buy safe-haven U.S. dollars, despite concerns over the sustainability of Argentina’s debt load over the long-term.

Argentina is struggling to stabilize its economy, which has suffered a series of setbacks after a bad drought sapped the grain export sector early in the year. A run on the peso led the government to turn to the International Monetary Fund to ease market concerns over its ability to service its bonds in 2019. (Reporting by Jorge Otaola, writing by Cassandra Garrison)

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