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Tue Sep 17, 2019, 08:47 PM

Federal probe launched against Argentina's Macri for politically motivated devaluation

A federal court in Argentina today authorized an investigation into allegations that President Mauricio Macri ordered the central bank not to intervene during an August 12 selloff in the peso for political reasons.

The probe, filed by Federal Prosecutor Pamela Ochoa on Thursday and authorized today by Federal Judge Rodolfo Canicoba Corral, is based on statements by former Argentine Central Bank President Martín Redrado.

Redrado, 58, asserted on August 16 that "there was a political order on Monday (August 12) to allow the exchange rate to float, creating a megadevaluation."

Government sources, according to Redrado, disclosed to him that "the president said that 'the dollar will go where it has to, such that Argentines may learn who to vote for'."

Sore loser

Macri's alleged decision was made the morning after a drubbing in the first round of presidential voting on Sunday.

Confounding most polls, Macri lost by 16% to center-left candidate Alberto Fernández - making the pragmatic Fernández the likely winner of a second round on October 27.

The dollar climbed 23% that Monday, from 46.55 to 57.30 pesos - its sharpest since Macri's own, December 17, 2015, devaluation in his first week in office.

But trading volumes were moderate in Buenos Aires' official foreign exchange market (MULC): $550 million (including public sector sales), compared to an average the prior week of $800 million a day.

Absent official intervention, the dollar rose sharply in early hours to an intraday record of 63 pesos - until a $105 million central bank dollar sale at 1:30 p.m. reversed the trend, helping ease the dollar to 57.30.

Delayed action, delayed payments

The probe also targets Central Bank head Guido Sandleris and former Economy Minister Nicolás Dujovne, who resigned on August 17 - the day after Redrado's disclosure. Both spent the morning of August 12 in a closed-door meeting with Macri - but refused to intervene in the early hours of the crisis.

Reserves have fallen by $16 billion (24%) since August 11 - led by $10 billion in dollar withdrawals (30%) by Argentines worried over possible banking limits similar to the infamous Corralito in late 2001.

Currency controls enacted on September 1 have stabilized the peso, which closed today at 59.06.

But a six-month deferral ordered on $13 billion in public debt payments, and a ban ordered yesterday on servicing private and provincial debts owed abroad, have further strained corporate, mutual fund, and public-sector finances.

At: https://translate.google.com/translate?hl=en&tab=wT&sl=es&tl=en&u=http%3A%2F%2Fwww.infonews.com%2Fnota%2F325382%2Fmacri-dujovne-y-sandleris-en-la-mira-de

Davos darlings until just last year, Argentine President Mauricio Macri, his recently-dismissed Economy Minister Nicolás Dujovne, and Central Bank head Guido Sandleris now face charges of deliberately allowing the peso to fall 19% on August 12 "in order to teach Argentines who to vote for" - and for possible self-enrichment, given their own highly-dollarized assets.

Macri had been trounced the day before in first-round elections by center-left candidate Alberto Fernández, who if elected will inherit an economic collapse and debt crisis.

"Creditors themselves are becoming aware of the problem they and all of us are in, and are showing good will," Fernández noted.

"They themselves have shown me (debt) rescheduling proposals."

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Reply Federal probe launched against Argentina's Macri for politically motivated devaluation (Original post)
sandensea Sep 17 OP
Judi Lynn Sep 18 #1

Response to sandensea (Original post)

Wed Sep 18, 2019, 03:01 AM

1. October 27th seems so far away right now, doesn't it? Hoping nothing will happen to turn the tide.

It took many levels of criminality to wreck the economy this much, and Macri and his allies were up to the challenge.

They had it planned, clearly, in advance, to have protected and improved their own financial situations while everyone else suffered.

No sense of honor, a prime fascist, or grifter trait.

A little more than a month, and maybe the country can start getting back on the road to recovery, if tragedy doesn't strike again.

Thanks for the latest, sandensea.

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