EMERGING MARKETS-Argentina's peso plunges after FX liberalization, other Latam assets broadly rise

By Pranav Kashyap and Johann M Cherian

April 14 (Reuters) - Argentina's peso slid on Monday after the nation eased its currency controls while other assets in Latin America were broadly up, with markets closely monitoring developments on the tariff landscape.

The peso ARS=RASL weakened about 8.6% and was last at 1,169 against the dollar. Traders said the opening price would likely quickly adjust, with the gap between the buy and sell prices narrowing.

This decline followed the introduction of a new exchange rate regime, where the central bank has relaxed its grip on currency controls and the peso is now allowed to float freely within a gradually expanding band between 1,000-1,400 pesos per dollar.

On the other hand assets in the country saw broad-based gains as the move coupled with billion dollar loan agreements signed with international lenders including the International Monetary Fund were met with confidence among investors.

The country's Merval stock index .MERV jumped over 8%, with YPF YPFDm.BA adding nearly 4% after brokerage HSBC upgraded the oil giant to 'hold' from 'reduce'.

Hard-currency bonds 040114HX1=1M, 040114HT0=1M also gained about 4-5 cents on the dollar, while U.S.-listed Global X's exchange traded fund ARGT.N surged 7.3%.

"Investors knew that the release of capital controls would come with an IMF deal, but the details were unclear and some feared an overnight devaluation, which could lead to a spike in inflation," said Malcolm Dorson, senior EM portfolio manager at Global X.

"The announcement of a managed float within bands checks two important boxes: first, it represents a big step towards a free trading currency and second, it relieves fears around a sharp overnight devaluation. We think that this move will attract foreign direct investment and lead to a jump in (economic) growth in the country."

Also in focus during the day will be U.S. Treasury Secretary Scott Bessent meeting with Argentina President Javier Milei.

Meanwhile, the broader Latin American equities index .MILA00000PUS rebounded by 2.6%, after marginal declines last week, while a currencies index .MILA00000CUS added 1.2% against the U.S. dollar.

Brazil's real BRL= appreciated 0.5% and the local stock index .BVSP rose 1.1%, while Mexico's peso MXN= firmed 1.3% and the domestic benchmark stocks index .MXX added 2.1%.

Global markets were relieved after the White House exempted smartphones and computers from the "reciprocal" tariffs on China, on the back of the 90-day pause U.S. President Donald Trump announced on some levies late last week.

However, uncertainties persisted after he said further semiconductor levies remain imminent, while brokerages have said that his trade assault on the world has already damaged the global economy.

A recession is likely to also weigh on demand for resources such as industrial metals and crude oil - top contributors to export revenues for economies in the region. The Organization of Petroleum Exporting Countries cut its 2025 global oil demand growth forecast for the first time since December.

In other regional developments, market-friendly Ecuadorean President Daniel Noboa, alongside the country's electoral authority, confirmed his full four-year term victory on Sunday.

The country's international dollar bonds XS2214237807=TE, XS2214238441=TE, XS2214239175=TE surged, each gaining between 11 to 15 cents.

Key Latin American stock indexes and currencies at 1422 GMT: