UPDATE 2-Argentine peso dips, central bank keeps key interest rate at 60 pct

(Adds President’s budget meeting with governors)

BUENOS AIRES, Sept 11 (Reuters) - Argentina will maintain its benchmark interest rate at 60 percent until at least December, the central bank said on Tuesday, adding that it would take any measures necessary to control inflation and assure the country will continue meeting its debt obligations.

The peso currency closed 1.53 percent weaker at 37.96 per dollar, pressured by weakness in other emerging market currencies and continued trade tensions among major global powers, traders said. Argentine asset prices have plummeted as the economy slips into recession and fiscal worries persist.

The currency has lost nearly 51 percent of its value this year. The next big test for Argentina will be passage of the government’s 2019 budget bill. The proposal includes unpopular spending cuts aimed at reducing the primary deficit to zero next year, a move intended to bolster the peso by improving confidence in the government’s ability to pay its debts.

Economy Minister Nicolas Dujovne met with provincial governors on Tuesday to open budget talks. “We have reached an agreement with opposition members that will allow us to achieve a balanced budget,” Dujovne told reporters after the meeting.

He said he expects the economy to contract this year but that it will start growing again in 2019.

The peso’s slide on Tuesday was a reversal from last week, when hopes that the outcome of new talks with the International Monetary Fund would stabilize the country’s flagging economy and reign in inflation.

“Last week’s nod toward recovery is evaporating quickly, even though investors are still confident that the new agreement with the IMF and the 2019 budget goals will show favorable results over the short term,” economist Gustavo Ber said.

Argentina is re-negotiating the terms of a $50 billion standby financing agreement struck with the IMF in June. The government recently revamped its fiscal targets to include erasing the primary fiscal deficit in 2019 though budget cuts and export taxes. (Additional reporting by Walter Bianchi; writing by Hugh Bronstein; Editing by Cynthia Osterman)