BUENOS AIRES (Reuters) – Argentina’s peso currency traded 2.85% weaker at 57.95 per U.S. dollar on Wednesday, cutting what had been steeper losses early in the day as the central bank sold $262 million of its reserves in five interventions aimed at controlling the peso’s fall.

Worries about Argentina’s ability to meet its dollar-denominated debt obligations have increased since the peso got trounced by political uncertainty after an Aug. 11 primary election. The peso has lost 21.78% of its value against the U.S. dollar since Aug. 12.

The central bank issued a press release saying it would limit financing in pesos for major exporters, a move aimed at strengthening the local currency by encouraging companies to sell dollars in order to obtain pesos needed to fund operations.

“It is not clear whether firms will actually respond by selling foreign exchange, particularly in the current environment,” Edward Glossop, Latin America economist for Capital Economics, told Reuters.

“With capital flight picking up and concerns about the International Monetary Fund deal and debt restructuring still dominating, this is unlikely to prevent the peso from falling further,” he said.

The markets have been in turmoil since the primary vote, which revealed thinner-than-expected support for the re-election of business-friendly President Mauricio Macri. His center-left Peronist rival, Alberto Fernandez, is now favored to win the presidency in the Oct. 27 general election.

At the start of the week, Fernandez blamed Macri and the International Monetary Fund for Argentina’s economic woes, spurring market fear that an eventual Fernandez presidency would lead to a severe break from Macri’s orthodox economic policies.

Country risk 11EMJ rose 135 basis points to 2,125 on Wednesday, its highest level in 14 years, according to the JP Morgan Emerging Markets Bond Index Plus.

(Graphic: Argentina country risk link: here)

Argentina’s central bank sold $50 million of its reserves in its first dollar auction of the day at an average 58.833 pesos per dollar, as part of its effort to control the peso’s fall.

Minutes later the bank sold $65 million more of its reserves at an average 58.7269 pesos per dollar, traders said. The bank quickly followed up with a third auction, selling $55 million at an average 58.2354. In its fourth intervention of the day, the bank sold $21 million at an average 57.2346 pesos per dollar.

The bank later sold $71 million in reserves at an average 57.6684 to the greenback, traders said.

On Tuesday, the bank exceeded for the first time a guideline on reserve sales agreed as part of Argentina’s $57 billion standby deal with the IMF, selling $302 million in the foreign exchange market.

The agreement with the IMF limits Argentina’s central bank to $250 million in reserve sales daily, set when the exchange rate was above 51.5 pesos per dollar, with the option to intervene further to “counteract episodes of excessive volatility.”

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