Central Bank autonomy at stake

Redrado turned away from his office on Sunday night.

The New York Times published a nice article the other day on the controversy over Argentina’s Central Bank. Over the next few days, the Argentine Congress is going to be looking at the situation and deciding whether to fire Redrado – as Kirchner wants – or to keep him on.

I imagine what most observers are worried about is autonomy. Take a populist executive and give her control over the currency, and you pretty much know how that movie ends: She prints piles and piles of money to pump up government spending until inflation spirals out of control.

There’s precedent indicating that control over and manipulation of the Central Bank is exactly what Kirchner’s after. Apparently she took control of the National Institute for Statistics and Census (INDEC) in 2006, and the data have been unreliable ever since. La NaciA?n reports that many Argentinian observers fear the same will happen at the Central Bank.

The taking of the Central Bank may have in fact already started. ClarA�n writes that the release of reports on the exchange rate and inflation have been postponed until today, when it looks like they’ll be released, but in a heavily edited form. Also, the Central Bank offices are being “purged” of Redrado supporters.

Not a good moment to invest in the peso, if you ask me.

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Related posts:

  1. Showdown at the Central Bank
  2. Redrado steps down
  3. Loose money
  4. Bank tweeters arrested
  5. Kirchner up against it
This entry was posted in Argentina, Economy, Politics and tagged , , , , . Bookmark the permalink. Post a comment or leave a trackback: Trackback URL.

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  1. By | Lat/Am Daily on January 29, 2010 at 4:27 pm

    [...] Redrado has recognized that he’s probably going to get fired from his post as Argentina’s Central Bank when a congressional commission releases its decision later today, putting an end to the week-long controversy. [...]

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