Argentine Central Bank chief says he’ll challenge president’s decree ousting him

Argentine Central Bank chief to challenge ouster

BUENOS AIRES, Argentina — A judge on Friday blocked Argentina’s President Cristina Fernandez from using Central Bank reserves to pay part of the national debt and the government announced it will appeal, a day after Fernandez fired the bank’s chief for balking at such payments.

Opposition congressman Federico Pinedo told Radio 10 that a federal judge accepted a motion he filed along with other lawmakers to keep the president from using reserves of the autonomous Central Bank.

Interior Minister Florencio Randazzo said the government would appeal the judge’s ruling, telling Radio 10 that the constitution clearly gives it the right to issue the emergency decree.

Fernandez issued another emergency decree on Thursday removing Central Bank President Martin Redrado for failure to fulfill his duties.

Redrado angered the president by refusing to comply with an order to use about $6.6 billion in reserves to help cover $13 billion in international debt falling due this year. Redrado had said he would wait for Congress to ratify the measure when it returns to session in March.

He told the Todo Noticias television channel on Friday that he would ask a court to annul the emergency decree firing him.

Fernandez defended her push to tap the nation’s reserves at a public appearance Friday, saying it would keep Argentina from paying “fat profits” to speculators.

“It’s much better to use the reserves than to borrow at interest rates of 15 or 14 percent, when the reserves are barely earning 0.5 or 1 percent,” she said.

Fernandez’s initial decree would create a special debt-payment fund of about $6.5 billion from central bank reserves currently totaling nearly $48 billion.

Opposition lawmakers accuse Fernandez of violating the bank’s autonomy by ordering it to use reserves to pay the debt and Pinedo said that federal judge Maria Jose Sarmiento has ruled that the presidency cannot touch the reserves. Nobody answered the phone at Sarmiento’s office on Friday.

Interim bank chief Miguel Pesce took charge of the institution on Friday. He made no comment to reporters as he entered the bank’s offices.

Redrado earlier had rejected Fernandez’s request for him to resign, saying that only Congress has the power to remove the Central Bank president.

Vice President and Senate chief Julio Cobos convened political party leaders to analyze the legality of the presidential decrees — a potential first step toward a special summer session by a Congress in recess. Cobos has a rocky relationship with the Fernandez administration after helping defeat a proposed export tax on grains last year.

Argentina’s main Merval stock index closed down about 1.5 percent, but the Argentine peso was stable against the U.S. dollar.