The Argentine Industrial Union message was made public on Tuesday when the Argentine peso rebounded against the US dollar closing trading at 3.23 pesos.
"The recent depreciation of the Brazilian real of almost 40% has left the real exchange rate with Brazil at the deteriorated level of 2001," said UIA in a release. Brazil is Argentina's main trade partner.
The strong lobby called on Argentine authorities to recall the impact that the 60% devaluation of the real had on Argentina ten years ago in terms of exports, production and employment."
The president of UIA, Juan Carlos Lascuarin, from the metal industry and a close ally of the Kirchners warned that "if the situation continues, economic evolution will repeat the reiterated problems which have been experienced by the country".
In first place "we will see a slowdown in economic growth (if the automobile industry and basic metals had not been included the performance of industry would have fallen 1.9% this year, and this before the current financial crisis)," warned the UIA.
This is followed by problems with payments to suppliers, revenue for the government and finally on employment and the labor market, added UIA.
The release was made public when Argentine stocks and bonds rebounded as assets, which were not traded Monday because of a holiday, played catch-up with the previous day's gains in the US and Brazilian markets.
The Merval index rose 10.99% to 1,349.69, though it had been up by more than 14% in early trade.
However in spite of the impressive rebound traders say the market has a long way to go before investors really regain lost confidence in emerging markets such as Argentina amid the global financial crisis.
The index heavyweight and Brazil state-run oil giant Petrobras (APBR) rose 26.90%, while Petrobras Energia (PBE), rose 18.51%. Steel tube maker Tenaris (TS), the performance of which is closely tied to that of the energy sector, jumped 15.65%. Other energy and financial shares were also up.
"Stock prices on the exchange are really risible," said Adelmo Gabbi, president of the Buenos Aires Stock Exchange. "These are really ridiculous prices. Whoever invests today is going to make money. It's guaranteed."
Meanwhile the Argentine peso gained ground against the US dollar, closing at 3.21 from 3.223 on Friday. The peso had been dropping at a rate of about one centavo a day in recent days.
Mercopress