Argentina’s Kirchner Calls for Broad Pact to End Currency Woes

Argentine Vice President Cristina Fernandez de Kirchner called for a broad pact to resolve the country’s currency problems, which she describes as its biggest structural problem amid mounting pressure to devaluate the peso.

In a rare public statement published Monday, Fernandez de Kirchner said Argentina’s bi-monetary system -- in which the public earns and spends in pesos, but saves and imports in U.S. dollars -- is unsustainable and needs to be fixed once and for all.

“The problem of a bi-monetary economy, which is undoubtedly the most serious in the country, is impossible to resolve without an agreement,” across the political, social and economic spheres in Argentina, Fernandez de Kirchner wrote on her website. “Whether we like it or not, that’s the reality and you can do anything with it except ignore it.”

Argentina’s Kirchner Calls for Broad Pact to End Currency Woes

Fernandez de Kirchner’s currency comments backdrop speculation about a possible peso devaluation, which government leaders have denied. Argentina’s unofficial exchange rates with the dollar are more than double the official rate after the government’s tightened already strict currency controls.

She defended the currency controls she implemented during her presidency, which ran between 2007 and 2015, and labeled the devaluation gossip as “extortion.” The country’s dual currency situation must change, she argued.

“Does anyone seriously think that a country’s economy can function normally this way?” she asked rhetorically. “Argentina is the only country with a bi-monetary economy.”

Defense

In her note, Fernandez de Kirchner also defended President Alberto Fernandez, who won Argentina’s election a year ago largely thanks to her backing and the support of her loyal voter base. Critics have blasted Fernandez this year for some populist decisions that revive memories of Fernandez de Kirchner’s leadership, raising questions about who is making top decisions.

“In Argentina the one who decides is the president,” Fernandez de Kirchner wrote. “Whether you like or not what he decides, he’s the one who decides. Don’t let anyone convince you of the contrary.”

The two leaders’ relationship has been questioned since Fernandez lambasted Kirchner during her second term as president. Members of her far-left wing in a broad coalition have recently criticized Fernandez on foreign policy.

Fernandez de Kirchner penned the essay to mark 10 years since the sudden death of her husband, former president Nestor Kirchner, and one year since the election win. Outside of occasional tweets, it’s unusual for her since becoming vice-president to opine on economic issues.

©2020 Bloomberg L.P.

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