Argentina's peso began to recover on Friday as markets opened, making a tiny 0.68 percent gain after losing 20 percent of its value against the dollar over the previous two days.

The peso was trading at almost 40 to the dollar -- a record low -- at the end of Thursday as Argentina's central bank hiked interest rates to 60 percent in a desperate bid to stabilize a currency in freefall since President Mauricio Macri requested an acceleration to IMF-agreed funding a day earlier.

Argentina's currency has lost more than 50 percent of its value against the dollar since the start of 2018 as investor confidence in the South American giant has plummeted.

Inflation over the last 12 months is at around 30 percent.

A $50 billion three-year stand-by loan was agreed with the International Monetary Fund in June, with an initial $15 billion tranche released then and another $3 billion due next month.

Part of that first tranche was meant to help shore up the peso, but after Macri revealed Argentina had asked for early release of the remaining funds, the peso started to plunge.

That had a positive effect on the Merval index on the Buenos Aires stock market, though, as it jumped 5.34 percent by close on Thursday on the back of strong performances in the petroleum sector, notably by Brazilian giant Petrobras with a 13.5 percent rise in share price.

Finance Minister Nicolas Dujovne is heading to Washington next week to "continue to progress" talks with the IMF on "additional disbursements in 2019."

The IMF released a statement saying its "goal is to rapidly conclude these talks and submit the revised economic plan to the Executive Board."

Chief IMF spokesman Gerry Rice said: "Argentina has the full support of the Fund and we are confident that the strong commitment and determination of the Argentine authorities will help the country overcome the current difficulties."

- 'Transformation not failure' -

Macri's request had seen the peso lose almost 7.0 percent on Wednesday and when it opened on Thursday down another 4.0 percent, the Central Bank decided to intervene, pledging to keep interest rates at 60 percent until December at least.

But that measure didn't stop the fall as the peso ended the day down 13.5 percent.

Cabinet Chief Marcos Pena had tried to downplay the crash, saying: "We are not facing economic failure.

"This is a transformation, not failure. In that transformation there are difficult moments."

Macri's government has committed to reducing its budget deficit to 2.7 percent this year, from 3.9 percent in 2017, and to 1.3 percent of GDP next year in return for IMF support.

Speaking on Thursday at the opening of the Council of the Americas business chamber in Buenos Aires, Pena blamed Argentina's economic woes on the free-spending policies of Macri's predecessor Cristina Kirchner and her left-wing government.

"We are the country that has the most times violated its international contracts in the world, which has lied and cheated the rest of the time, and has shown again and again -- until now -- that it is not willing to seek fiscal balance and depend on its own resources," he said.

Europe-based Deutsche Bank analyst Jim Reid says Argentina is managing its "currency crisis in a more conventional manner" now with the central bank raising interest rates "to the highest in the world."

But he said IMF disbursements could lead to "a tighter fiscal deficit target," which could in turn provoke more currency fluctuations.