November 23, 2016 / 9:20 PM / 4 years ago

Argentina black market peso falls to weakest in 13 months -traders

BUENOS AIRES, Nov 23 (Reuters) - Argentina’s black market peso, which trades on informal markets, fell on Wednesday to its lowest level against the dollar in 13 months, before President Mauricio Macri took office and lifted currency controls, traders said.

The black market peso fell 0.82 percent to 15.95 per dollar, while the peso at the official exchange rate fell 0.64 percent to 15.55 to the dollar.

Traders cited worries over the sharp rise in the government’s fiscal deficit in October. The data was reported by the finance ministry late on Tuesday.

Argentina’s previous president, populist President Cristina Fernandez, used central bank reserves to artificially prop up the peso, and restricted access to dollars through a policy known as the “clamp.” That spawned a currency black market and a black market rate substantially weaker than the official rate.

Macri lifted capital controls and allowed the peso to float shortly after taking office last December, causing a prompt devaluation that brought the official rate much closer to the informal rate.

The peso traded stronger at the black market rate than at the official rate for the first time in decades in February, which was considered a sign of confidence in Macri at the time.

Also contributing to the declines on Wednesday were the strength of the dollar against currencies globally and profit-taking ahead of the U.S. Thanksgiving holiday on Thursday, traders said. (Reporting by Jorge Otoala; Writing by Luc Cohen; Editing by Phil Berlowitz)

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