Argentine peso fall threatens government Argentines will await the opening of currency markets on Friday with more nervousness than usual after Thursday's 10 per cent fall in the peso against the US dollar. Analysts said the central bank appeared to have abandoned the currency to its fate and that the episode could hasten the end of the government of president Cristina Fernández de Kirchner. "The chickens of populism have come home to roost," said Arturo Porzecanski of the American University, a former head of emerging markets research at ABN Amro. This is the beginning of the end of Kirchnerism in my view. The peso fell as much as 15 per cent in thin trading on Thursday after the central bank suddenly and silently removed its support. It recovered to close down about 10 per cent after the bank reappeared towards the close, selling about $100m, analysts said. The bank's late intervention left investors in the dark about how it would behave when trading reopened on Friday. "That's what happens in markets," said Siobhan Morden, Latin America strategist at Jefferies in New York. Pressure builds, and when the central bank backs away, everyone starts to panic. She said investors would look to data on monetary deposits in Argentine banks, due to be published on Friday with a one-week lag, for any evidence of capital flight. The peso has come under mounting pressure since November, when Mrs Fernández announced cabinet changes that undermined confidence in her government's ability to address problems including runaway inflation and a sharp deterioration in public finances. The currency, already struggling under a worsening trade account, has lost about a quarter of its value against the US dollar since then. Argentina has been criticised by the International Monetary Fund for the unreliability of its data on inflation, which the government says is about 10 per cent a year but which private economists say is closer to 25 per cent. The government is faced with either a further confidence-shattering loss of reserves or a further confidence-shattering devaluation of the peso. All the good options are gone Arturo Porzecanski, the American University The country has been able to weather such high rates of inflation thanks to a comfortable trade surplus generated by exports of commodities such as wheat. Until recently, the private and public sectors were able to grant pay rises big enough to more than compensate for rising prices and the central bank's main task was to buy dollars entering the country, printing pesos to do so and in the process expanding the money supply by more than 30 per cent a year for the past four years. But faced with rising imports and falling exports, coupled with a surge in demand for dollars among a population that appears to have lost faith in the peso, the bank has had to defend the currency by selling dollars, running down its foreign exchange reserves to dangerous levels. Meanwhile, the government has introduced unorthodox measures to try to stop Argentines buying dollars, including restrictions on purchases by tourists, credit card purchases and, this week, internet purchases. "It's become clear that all those fingers in the dike are not enough," Mr Porzecanski said. All the good options are gone. He said losing control of the currency, after the government appeared to lose control of the streets during nationwide protests last month, was a "very significant moment" for the Fernández administration.