Political Risk Latin America Blog @PolRiskLatam

Argentina Central Bank Won’t Be Independent, Goldman Sachs Says

Posted in News and Articles, Political Risk by politicalrisklatam on February 4, 2010

by Eliana Raszewski and Drew Benson, for Bloomberg, February 4, 2010.

Feb. 4 (Bloomberg) — The independence of Argentina’s central bank will be undermined following the nomination of Mercedes Marco del Pont to lead the institution, Goldman Sachs Group Inc. economist Alberto Ramos said.

President Cristina Fernandez de Kirchner yesterday named Marco del Pont, president of state-owned Banco de la Nacion Argentina, to replace ousted central bank chief Martin Redrado. The move came after a congressional committee backed Fernandez’s Jan. 7 decree dismissing Redrado for not supporting her plan to tap $6.6 billion of reserves to pay debt due this year.

“The new president is very closely aligned with the government and won’t have an independent voice,” Ramos said in an interview last night. “The government wants to continue spending at elevated rates to have short-term growth and the central bank won’t raise interest rates, it won’t have its own voice.”

Speaking to reporters on her way to the bank today, Marco del Pont said she would continue current monetary and exchange rate policies that aim to avoid sharp exchange rate fluctuations and maintain a “competitive” peso…(continue reading)

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