The local currency traded at 38.65 to the US dollar, after having shot up 4.42 percent on Monday, boosted by the central bank's sale of $1.78 billion of seven-day "Leliq" notes with an annual interest rate of 67.175 percent.

The bank says it plans to issue Leliq debt on a regular basis as the country battles inflation expected to exceed 40 percent this year. The peso has lost more than half its value against the dollar so far in 2018.

The Leliq auctions are intended to reduce the amount of pesos available for nervous investors to put to work buying safe-haven US dollars.

A $57 billion International Monetary Fund standby financing deal, upgraded from an original $50 billion, includes sharper spending cuts and tax hikes aimed at wiping out the country's primary fiscal deficit, which is expected to equal 2.6 percent of gross domestic product this year.

The agreement also calls for the peso, effective on Monday, to trade in a range of 34 to 44 per US dollar.

The central bank has agreed with the IMF not to intervene in the foreign exchange market as long as the peso remains in that band. The monetary authority has spent almost $16 billion in reserves to prop up the peso so far this year.