Argentine peso slips after economy minister Guzman's shock exit

* Argentine peso slips 0.5% to 126.11 per dollar

* Silvina Batakis appointed as Argentina's new economy minister

* Batakis's unorthodox profile may not calm expectations - Citi

* Chile's peso recovers from all-time low

By Susan Mathew and Sruthi Shankar

July 4 (Reuters) - The Argentine peso fell on Monday after the abrupt resignation of long-standing economy minister Martin Guzman left only uncertainty for investors, while most other regional currencies made muted moves against a slightly weaker dollar.

Argentina's center-left President Alberto Fernandez named economist and government official Silvina Batakis as the new economy minister late on Sunday. Batakis is seen as close to Argentina's powerful vice president Cristina Fernandez de Kirchner.

Guzman, a moderate and the architect of Argentina's $44 billion deal with the International Monetary Fund, quit amid rising tensions within the ruling Peronist coalition over how to handle economic crises.

The heavily controlled peso ARS=RASL weakened 0.5% to 126.11 per dollar.

With inflation above 60%, a high fiscal deficit, rising fears about debt defaults and savers losing faith in the peso currency, Argentina's currency now trades at nearly a 50% discount in the black market and its bonds are worth roughly half of what they were after the country's $100 billion-plus 2020 debt restructuring.

"We think that Silvana Batakis's appointment is unlikely to be enough to fix (Argentina's) issues, and hence it may fall short in stabilizing sentiment. Moreover, we believe her more unorthodox profile may work against calming expectations," said Citigroup analysts Fernando Jorge Diaz and Ivan Stambulsky.

William Jackson, chief emerging markets economist at Capital Economist said the rising influence of Fernandez de Kirchner could lead to a looser fiscal stance that is accompanied by higher inflation and tighter capital controls, with the country's IMF deal already fraying at the seams.

"This would push Argentina further away from the path towards macro stability... A sovereign default is starting to look increasingly likely."

Among other regional currencies, Chile's peso CLP= firmed 0.5% to trade at 927.60 per dollar, recovering from an all-time low of 939.60 hit on Friday.

A stronger dollar, sliding prices of copper - Chile's top export, and protests at its biggest mining company Codelco have all hurt the currency this year.

The Brazilian real BRL= and the Mexican peso MXN= made small moves against a weaker dollar, with a holiday for U.S. markets making for a quite trading session.

Colombian markets were closed for a local holiday.

Elsewhere, Israel's central bank raised its benchmark interest rate by a half percentage point to 1.25%, to battle rising inflation and stay ahead of the U.S. Federal Reserve which is on a tightening path.

Key Latin American stock indexes and currencies at 1323 GMT: Stock indexes


Daily %

change MSCI Emerging Markets


0.03 .MSCIEF



0.03 .MILA00000PUS

Brazil Bovespa


-0.28 .BVSP

Mexico IPC


- .MXX

Chile IPSA



Argentina MerVal





Daily %

change Brazil real


0.05 BRBY

Mexico peso


-0.19 MXN=D2

Chile peso


0.25 CLP=CL

Peru sol


0.00 PEN=PE

Argentina peso


-0.41 (interbank) ARS=RASL

Argentina's double dollar Link

Reporting by Susan Mathew and Sruthi Shankar in Bengaluru;

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