Several additional South American countries have been swept up in what is becoming the region's worst economic crisis in two decades, igniting fears of a replay of the Latin American financial collapses of the early 1980s.

The crisis, which analysts had hoped would be contained to Argentina's financial meltdown six months ago, has now spread to its neighbors Brazil, Uruguay and Paraguay. It has threatened to engulf other politically unstable economies in the region as well, including Bolivia and Venezuela, where analysts predict deep recessions for this year.

But this week, investor flight has particularly hit Argentina's immediate neighbors. In Brazil, Latin America's largest economy, government bonds have fallen to half their face value in recent weeks because of fears of a government default. The Brazilian real, in a tailspin that has lowered its value against the dollar by 19 percent this month, today touched its lowest point since going into circulation as the national currency in 1994.

Paraguay has come face-to-face with the prospect of a banking collapse and a deepening recession. Here in tiny Uruguay, dubbed the "Switzerland of Latin America" for its rock-solid financial system, government officials trying to stave off a debt default are seeking an immediate loan from the International Monetary Fund, the U.S. Treasury and other major foreign lenders.

To ease the pressure, the Uruguayan government was forced to close banks Tuesday for the first time in 20 years. It decided today to extend the banking holiday until Monday. The closure left many Uruguayans lining up in front of ATMs.

"We're becoming another Argentina," said Maurice Lopez, 45, a Montevideo store clerk who waited today to withdraw cash from an ATM. "I can't believe it has come to this."

"If the financial markets don't regain a minimum of composure in their attitude toward South America, I'm afraid we're going to see a lot of countries suffer there," said John Williamson, senior fellow at the Washington-based Institute for International Economics.

The troubles here, analysts say, could be a further drag on an already sluggish global economic recovery. But for Washington, renewed economic turmoil in Latin America poses additional complications.

Numerous nations in the region have begun a wide embrace of U.S.-backed free market reforms, including privatizations and lowered trade tariffs. As economies have felt the fallout, a backlash has emerged, fueling political recrimination in nations such as Peru and Paraguay. In recent weeks, both have suffered deadly rioting against sell-offs of state-run industries.

The crisis in the region may prove to be the most important test yet for the Bush administration's harder line on financial bailouts. The situation has added urgency to Treasury Secretary Paul H. O'Neill's visit, scheduled for next week, to Argentina, Brazil and Uruguay. O'Neill has said he will not be arriving with fresh aid, but South American diplomats said he will face intense lobbying for a softening of the U.S. stance.

"From our point of view, there is no question the U.S., now more than ever, needs to play a more active role in handling the crises," said a Latin American diplomat. "An economically weak South America means a politically unstable South America."

The regional troubles, analysts say, are linked at least in part to delayed contagion from the meltdown in Argentina, which staged the largest debt default in history last January and has since slumped into its worst economic crisis ever.

Uruguay, for instance, is heavily dependent on Argentina for trade and on Argentines as customers for its vital service industries of banking and tourism. In Brazil, worries are tied to a crisis of confidence during its election season as analysts fret over how the successor to President Fernando Henrique Cardoso will manage that nation's massive $250 billion debt.

In other nations, such as Venezuela, economic problems are based almost exclusively on internal factors. The political troubles in Caracas and uncertain management of President Hugo Chavez have fostered investor doubt, leading to predictions of a deepening recession there.

Although the troubles have been mounting for weeks, panic exploded this week as investors focused on Brazil and Uruguay.

Brazil's country risk rating, a key indication of investor confidence, hit record highs as investors appeared unable to unload Brazilian debt fast enough. In April, Brazilian debt was worth 86 cents on the dollar; it was 51 cents today. Worse, Brazil's currency, the real, has shed 34 percent of its value since January and 19 percent this month alone, despite attempts by the Central Bank to shore it up by pumping $1.5 billion into the foreign exchange market.

The plunging real has driven up the costs of servicing Brazil's debt, much of which is linked to the dollar.

Investor fears in Brazil are tied to October elections and economic policies that could result. The problems began to mount after polls early this month showed that Cardoso's handpicked successor, former health minister Jose Serra, had fallen to third place in opinion polls. Topping the polls now are Luiz Inacio "Lula" da Silva, a left-wing candidate, and Ciro Gomes, a center-leftist.

"A default in Brazil is by no means inevitable . . . but the concern there is about how the politics will play out, how the party that gets to power handles the concerns of the markets," said Marie Cavanaugh, director for sovereign ratings for Standard & Poor's in New York.

Given Brazil's cash crunch, Central Bank President Arminio Fraga said in a television interview Tuesday that the government will seek to extend its current IMF deal into 2003. The current accord covering about $15 billion expires at the end of the year. Brazil is reportedly seeking an extra $10 billion to $20 billion in loans and guarantees.

Nowhere, however, is the situation graver than here in Uruguay. The country's economy has shuddered under the shock from Argentina. Although Uruguay's $8.5 billion debt is insignificant in market terms, a default here, analysts said, could nevertheless have a powerful psychological impact on investors.

Depositors, fearing banks here would freeze their savings as banks did in Argentina, had been withdrawing the equivalent of millions of dollars a day, sending banking deposits plunging. The flight has drained the Uruguayan Central Bank, where international reserves have fallen from $3 billion in December to $622 million, including the loss of $123 million on Tuesday.

Uruguayan officials have gone to Washington to seek a $1.5 billion loan with the Treasury, IMF and other foreign lenders. These would be fresh funds on top of an almost $3 billion deal the IMF struck with Uruguay early this year.

The U.S. Treasury on Tuesday said the administration stands ready to support additional funding for Uruguay from the IMF and other lenders.

Special correspondent Julio Scavino contributed to this report.