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Argentine stocks plunge after central bank chief quits and replacement causes worries

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BUENOS AIRES, Argentina — Argentina's Merval stock index plunged just over 7 percent Thursday in a sell-off sparked by the naming of a new central bank chief who many believe will favor interventionist policies.

Traders expect new central banker Alejandro Vanoli will order even more restrictive currency controls in trying to stem capital flight and boost Argentina's frail economy.

PHOTO: FILE - In this Aug. 4, 2014 file photo, Argentina’s President of the Securities and Exchange Commission Alejandro Vanoli talks during a press conference in Buenos Aires, Argentina. Vanoli will replace Juan Carlos Fabrega as Argentina’s Central Bank President after his resignation Wednesday Oct. 1,  2014.  (AP Photo/Natacha Pisarenko, File)
FILE - In this Aug. 4, 2014 file photo, Argentina’s President of the Securities and Exchange Commission Alejandro Vanoli talks during a press conference in Buenos Aires, Argentina. Vanoli will replace Juan Carlos Fabrega as Argentina’s Central Bank President after his resignation Wednesday Oct. 1, 2014. (AP Photo/Natacha Pisarenko, File)

Juan Carlos Fabrega resigned Wednesday after President Cristina Fernandez publicly suggested that the monetary institution might have leaked inside information that led to a steep drop in the peso.

Confidence has been dwindling in Argentina's economy, which is in recession as it grapples with falling central bank reserves and one of the world's highest inflation rates.

The stock index ended the day down 7.05 percent, at 10,703 points.

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PHOTO: A man talks by phone at the Buenos Aires Stock Exchange in Argentina, Thursday, Oct. 2, 2014. Argentina's Merval stock index is dropping nearly 9 percent in a sell-off sparked by the naming of a new central bank chief who many believe will favor interventionist policies. (AP Photo/Natacha Pisarenko)
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