May 8, 2018 / 9:00 PM / 10 months ago

EMERGING MARKETS-Argentina seeks IMF deal as peso hits record low amid Iran fallout

 (Updates prices, adds IMF deal)
    By Bruno Federowski
    BRASILIA, May 8 (Reuters) - The Argentine peso hit a record
low on Tuesday, hurt by geopolitical tensions, before the South
American country announced it is seeking an International
Monetary Fund (IMF)deal to stabilize its finances after two
weeks of volatility.
    The currency plunged as pessimism about the United States
abandoning the Iran nuclear deal added fuel to a weeks-long
global emerging markets sell-off.
    U.S. President Donald Trump on Tuesday pulled the United
States out of an international agreement aimed at stopping Iran
from obtaining a nuclear bomb, and said he would reimpose
economic sanctions on Iran immediately.
    The decision is likely to raise the risk of conflict in the
Middle East, upset America's European allies and disrupt global
oil supplies.
    In an address to the nation, Argentine President Mauricio
Macri said that he had spoken with IMF Director Christine
Lagarde, and that they had agreed to start to work immediately
on building an agreement. 
    Local newspaper Clarin said Argentina would seek at least
$30 billion in financing.
    The move was remarkable, given that many people still blame
the IMF's austerity requirements for policies that led to a
financial and economic meltdown in 2001 and 2002 that hurled
millions of middle class Argentines into poverty.
    The local peso currency, which regained some of the ground
it had lost earlier in the day, closed down 2.79 percent at 22.6
pesos per U.S. dollar after touching an all-time low of 23.5 to
the greenback during the session. Argentina's Merval stock index
also pared losses. 
    Currencies ended the day weaker across Latin America, where
Trump's Iran decision contributed to driving investors away from
high-yielding assets, already under pressure from growing
expectations of higher U.S. interest rates.

    Key Latin American stock indexes and currencies at 2027 GMT:
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets         1142.83      0.29     -1.63
 MSCI LatAm                    2809.50     -0.32     -0.34
 Brazil Bovespa               83171.68      0.55      8.86
 Mexico IPC                   46704.83       0.5     -5.37
 Chile IPSA                    5644.82     -0.02      1.44
 Chile IGPA                   28444.36         0      1.66
 Argentina MerVal             26131.19     -5.02    -13.09
 Colombia IGBC                12328.03      0.58      8.42
 Venezuela IBC                17550.52     -6.84    -44.64
 Currencies                              daily %     YTD %
                                          change    change
 Brazil real                    3.5690     -0.47     -7.16
 Mexico peso                   19.5745     -0.58      0.64
 Chile peso                     633.85     -0.79     -3.03
 Colombia peso                 2870.33     -1.75      3.89
 Peru sol                        3.288     -0.30     -1.55
 Argentina peso                22.3500     -1.70    -16.78
 Argentina peso                  22.65     -2.87    -15.10
 (Reporting by Bruno Federowski and Gabriel Stargardter; Editing
by Richard Chang and Sandra Maler)
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