What's New

Argentina’s Ex-President Fernández Suspected Of Role In Peso Inflation Scheme

An Argentinian court has ordered former president Cristina Fernández to face questions about her government’s handling of the futures dollar market, marking the first time she has been legally summoned for any of the handful of investigations against her.

Federal judge Claudio Bonadio said on Friday that Fernández was suspected of being part of a scheme to keep the Argentinian peso inflated by selling derivatives below market value. The sales also led to a sharp drop in central bank reserves.

Fernández was called to appear in court on 13 April along with former central banker Alejandro Vanoli and former economy minister Axel Kicillof. The allegations apparently do not involve personal enrichment for Fernández, president between 2007 and 2015.

Argentina has not been able to attract international loans at market rates since its 2001-2002 economic collapse. Instead, it uses the central bank reserves to buy fuel overseas, meet foreign debt payments and finance economic stimulus programs. The reserves plunged to their lowest in nearly a decade at the end of Fernández’s presidential term.

“The point of this move was to inflate the peso, to avoid the peso from weakening,” said economist José Luis Espert. “The central bank had two alternatives: assume a short-term crisis with a strong devaluation of the peso, or selling dollars on the futures market, deplete the reserves and accept a currency crisis. The central bank chose to kick the ball and sell dollars in the future.”

Authorities were also investigating a possible money laundering scheme at a luxury hotel owned by Fernández in Argentina’s Patagonia region. Bonadio was in charge of the case until he was removed by a top court in 2015 when his methods in the investigation where questioned. The case remains open under another judge.

In highly polarized Argentina, the summons represented more than just an investigation into possible wrongdoing.

The opposition was “waiting for some movement by the justice system on a corruption case [against Fernández], though this isn’t the most important of them”, said Celia Kleiman an analyst with consulting firm Polldata.

Soon after the summons was announced, many supporters took to social media to express their solidarity.

“If she gets called [to testify], they will have to call us all,” said a slogan circulating on Twitter.

Fernández was replaced by Mauricio Macri, a conservative who beat Fernández’s chosen standard-bearer, Daniel Scioli, in a November runoff.

Courtesy of Guardian News & Media Ltd ©2016


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: