A poor showing for Argentina's President Mauricio Macri and a surge for his leftist opponent sparked fears of a possible default on the country's IMF loans, sending the peso to its lowest level in nearly two decades and causing a massive sell-off in the country's stock market.
Although Macri, who belongs to the center-right Republican Proposal party, was not expected to do well in Monday's primary, populist Alberto Fernández and his running mate, ex-president Christina Kirchner, scored 15 points higher in their primary for Citizen's Unity.
The peso closed Monday 15% weaker at 52.14 per U.S. dollar, but earlier in the day it had briefly plunged by nearly 38%.
The country's Merval stock index plummeted by 37.93%.
Macri secured just 32 percent of the vote in his primary, while Fernández got 47 percent in his — making Fernández and Kirchner favorites to win the presidency in October elections.
Macri, who assumed the presidency in 2015, won on a promise to boost the economy. However, he was forced instead to seek a record $57 billion bailout from the International Monetary Fund.
The markets view Fernández and Kirchner, seen as free-spending left-wing populists, with deep suspicion. According to Reuters, Fernández has said he wants to "rework" the country's IMF agreement if he wins the general election.
Although the drop in the peso was fueled in part by fears that a new government could lead to Argentina defaulting on the IMF loan, the dropping value of the currency will make it that much harder to make those payments.
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