Argentina

.Argentina president says to ditch her dollars

Argentina's President Cristina Fernandez vowed on Wednesday to stop saving in dollars and told government officials to follow her example as tight foreign currency controls spook ordinary savers.

News Daily,

6 June, 2012

Fernandez, who needs to keep dollars in the country to repay public debt, said she had decided to lead by example and swap her only dollar-denominated savings account for a fixed-term deposit in pesos.

"I've decided to put my savings account into pesos," she said at the presidential palace besides an image of the country's famous first lady Evita Peron.

"I'd urge any officials who've got a few little dollars to do the same thing," the center-left Peronist leader said.

Fernandez's administration is battling brisk capital flight and relentless safe-haven demand for dollars. She wants Argentines to end their love affair with the greenback and start saving in the country's peso currency despite high inflation.

Several close allies of the president called last week for the country to start "thinking in pesos.

The near-impossibility of buying dollars at the official rate is driving some savers and investors to pay a hefty premium in the black market.

Others are withdrawing dollars from banks and stashing them under the mattress or in safety deposit boxes, fearing moves by the government to forcibly "de-dollarize" the economy. Officials have strongly denied any such plan.

Meanwhile, the central bank has been snapping up almost all the dollars available as it seeks to replenish the foreign reserves earmarked for debt repayments. So far this year, the monetary authority has bought about $7 billion.

Savers are notoriously jittery in Latin America's No. 3 economy, where memories of tight limits on bank withdrawals and a sharp currency devaluation remain fresh a decade after a devastating economic crisis.