BUENOS AIRES (Reuters) - Argentina and Brazil have agreed to extend a bilateral deal on automobile exports for another year, the Argentine minister of production said on Tuesday.

The current deal, which expires at the end of the month, allows each country to export a set value in vehicle production to the other.

Demand is weak in both countries, as Brazil, the top foreign buyer of Argentine cars, weathers a recession and Argentina grapples with high inflation and a currency devaluation which has lowered the value of the peso by 29 percent.

The current deal allows Brazil to export $150 in vehicle value for every $100 it imports from Argentina.

"It will continue with the same terms, which is very good for Argentina," minister Francisco Cabrera told journalists.

Argentine auto exports and production for 2016 are expected to hold steady or drop slightly, the ADEFA association of Argentine vehicle makers said this year.

The country produced 543,467 vehicles in 2015 and reported a 31.3 percent slide in vehicle exports.

Brazil was until recently one of the world's five biggest auto markets and remains a major base of operations for Fiat Chrysler Automobiles NV <FCHA.MI>, Volkswagen AG <VOWG_p.DE>, General Motors Co <GM.N> and Ford Motor Co <F.N>.

Stronger exports are unlikely to keep Brazil's production from falling for a third straight year, the country's automakers association said on Monday. Output is expected to shrink 5.5 percent in 2016.

(Reporting by Eliana Raszewski and Nicolas Misculin; Writing by Julia Symmes Cobb; Editing by Tom Brown and Phil Berlowitz)