FILE PHOTO: Argentina's President Javier Milei speaks during a business event in Buenos Aires, Argentina, March 26, 2024. REUTERS/Agustin Marcarian/File Photo

By Leila Miller and Rodrigo Campos

BUENOS AIRES (Reuters) -Argentina's international dollar bonds touched multi-month lows on Monday while stocks and the peso fell as corruption allegations threatened to embroil people close to President Javier Milei, whose economic policies have boosted financial markets.

Local media published audio recordings last week in which a voice that sounds like that of Diego Spagnuolo, then-head of the disability agency, can be heard discussing bribery within the agency. He alludes to Karina Milei, the president's sister and chief of staff, as receiving bribery payments.

Spagnuolo was later fired by the president. Government officials have not confirmed the authenticity of the audio, and cabinet chief Guillermo Francos has said that, according to Milei, Spagnuolo never mentioned the alleged bribery.

On Friday, various properties, including Spagnuolo's residence, were raided as part of a government investigation.

Milei did not address the allegations in a speech on Monday, but said he was unconcerned about what he called attacks from the opposition ahead of midterm elections. Opposition legislators, however, called for the chief of Argentina's Health Ministry, which oversees the disability agency, to answer questions about the matter in Congress.

The 2038 sovereign Argentine note fell 2.4 cents on Monday to 67.37 cents on the dollar after touching its lowest level in over four months, according to LSEG data. The 2041 issue fell nearly 3 cents.

Argentina's stock market benchmark fell 4% on Monday following a 3.8% decline last week. The peso was down almost 3% against the U.S. dollar at 1,356 per greenback.

Marcelo Garcia, director for the Americas at New York-based risk consultancy Horizon Engage, said foreign investors worry over whether a potential decline in Milei’s popularity would get in the way of his economic agenda.

“It affects the government’s capacity to be reputable enough to continue to introduce tough reform in the next two years,” Garcia said. “The Milei political strategy of continued confrontation with everyone requires him to be very popular.”

Garcia added that the disability bribery scandal is particularly sensitive because it hits at the stigma that Milei "doesn’t care for the weak and the poor.”

A spokesperson for Milei's government did not respond to a request for comment about the bribe allegations.

The scandal comes weeks ahead of a key local election in the Buenos Aires province and national midterm elections in October, where Milei's party is hoping to increase its presence in the opposition-controlled Congress.

(Reporting by Rodrigo Campos and Leila Miller; Editing by Chizu Nomiyama, Helen Popper, Chris Reese, Rod Nickel)