Argentina’s peso fell to a new all-time low on Tuesday as President Mauricio Macri’s government struggles to instil confidence in the worst-performing currency in emerging markets this year.

Down more than 10 per cent against the dollar so far this year, the peso plunged by 1.5 per cent on Tuesday, reaching 42.63 pesos to the dollar, while other currencies in the region, including the Brazilian real and the Colombian peso, also fell.

The peso, which lost half of its value last year in a currency crisis that forced Argentina to seek a record-breaking aid package from the International Monetary Fund, still traded well within the pre-established band of 39.26 and 50.81 pesos to the dollar set by then country’s central bank.

Markets are closely watching the performance of the peso. Currency stability is seen as a key factor for the re-election chances of Argentina’s pro-market president Mauricio Macri in October polls.

Higher-than-expected inflation this year forced the central bank to tighten monetary policy earlier this month as it triggered a renewed bout of volatility in the peso after strengthening slightly at the end of last year.

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