Wednesday, June 6, 2012

'My dollar fixed-term bank deposit will be pesified,' CFK

President Cristina Fernández de Kirchner today insisted on the need of saving in pesos instead of dollars and announced that she would "pesify" her dollar fixed-term bank deposit, urging her ministers to do the same.

During a ceremony at the Government House where she made several announcements, she urged Argentine people to recall the 2001 economic crisis, when "many people and some journalists" demanded a dollarization of the economy.

"I am surprised at the fact that there are people and journalists who are demanding a dollarization of the economy. If the dollarization had succeeded in 2001, we would all be dead," the president added.

"Did you forget what happened?," she asked, assuring savers who were affected by the "corralito" will receive Boden 2012 bonds on August 3.

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.