The peso in the so-called blue-chip swap market, used by investors who buy peso securities and sell their dollar equivalents abroad to skirt currency controls, plunged 2.2 percent to 12.9541 per dollar at 4:04 p.m. Buenos Aires time and extending its decline since the default to 22 percent. The currency in the black market weakened 1.3 percent to a record low 14.38 per dollar.

Argentina defaulted last month for the second time in 13 years after the country was blocked from making debt payments because President Cristina Fernandez de Kirchner refused to comply with a U.S. judge's order to also pay about $1.5 billion to a group of holdout creditors from an earlier default in 2001. Creditors including Elliott Management Corp., which is demanding payment in court, refused to accept losses of about 70 percent in debt restructurings following the earlier default and have spurned subsequent offers on similar terms.