Argentina’s Central Bank Governor Hangs Up His Boots

EspañolArgentinean Central Bank (BCRA) Governor Juan Carlos Fábrega resigned on Wedensday afternoon. His high-profile departure came a day after President Cristina Kirchner accused employees of the bank of leaking insider information to help the banks to “speculate and destabilize the economy.”

Alejandro Vanoli, brand-new governor of the Central Bank, has a more radical profile than his predecessor. (Diario Col)
Alejandro Vanoli, the brand-new governor of the central bank, has a more radical reputation than his predecessor. (Diario Col)

President Kirchner named Alejandro Vanoli, head of the National Securities Commission (CNV) — which regulates securities and the stock exchange — to replace Fábrega, who had been in charge of the bank since November 2013.

Vanoli’s arrival to the BCRA puts an end to the internal tussle between the outgoing central bank governor — deemed a moderate — and Minister of the Economy Axel Kicillof, an individual with more influence on the presidential office. Kicillof and Fábrega had different criteria regarding the pace of monetary expansion, interest rates, and the use of the reserves. Now, with the appointment of Vanoli, Minister Kicillof has reasserted his power within the government.

Vanoli was one of the main promoters of the controversial reform to stock-exchange regulation, which authorized CNV to “appoint observers with the power veto over resolutions adopted by the managing bodies” of public companies. In addition, he has an adamant stance against the publication of the informal exchange rates for the US dollar, which he has equated to “publishing the price of cocaine.”

This Wednesday, after another weakening of the Argentinean peso on the unofficial exchange rate with the US dollar, the government implied plans to escalate the presence of armed forces to battle illegal transactions.

“The government has tightened ranks with its hard core, its militant core, which puts it on a collision course with markets and the United States. This will bring more problems to the economy and to politics. I insist, this [appointment] is consistent with the decision of the government to align its domestic, foreign, and economic policies in that direction,” said political analyst Rosendo Fraga.

Martín Redrado, a former BCRA governor (2004-2010), has also described Vanoli as a “kid lacking of experience.… He was just an office clerk in the bank, with no technical skills,” he said.

Kirchner’s Cabinet Chief Jorge Capitanich announced that the executive will send the proposal “immediately” to the Senate for approval. He also pointed out that the BCRA governor will have to “focus on generating the conditions for the growth of the economy and employment” and to “establish conditions for monetary and exchange stability.”

Source: La Nación.

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