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State to Intervene in Exchange Market: Argentine President
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THU, FEB 21, 2002
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Argentine President Eduardo Duhalde said on Wednesday the State will intervene in the exchange market so as to fix the price of the U.S. dollar at 1.60 to 1.70 Argentine pesos.
Duhalde told local media he was convinced "there will be no ballooning dollar", and the State was able to peg the U.S. dollar at about 1.60 pesos.
Duhalde's remarks came nine days after the country's liberalization of the exchange market with the free-flotation of the peso.
After a week of relative stability, the price of the dollar went bullish and closed Wednesday at 2.20 pesos at exchange offices in Buenos Aires.
In response, Duhalde said: "The State is prepared to intervene in the currency market to bring the dollar down so as to prevent people from getting confused and feeling cheated once more."
Before liberalizing the exchange market, Argentina's central bank had claimed it had 14 billion dollars in reserves to keep a stable pricing.
Therefore, Duhalde said: "We've enough foreign currency .... the Central Bank will bring the dollar's price down, simply by pouring dollars into the market."
However, the Argentine head of state rejected the dollarization proposed by his predecessor Carlos Menem, saying this would "abort" a "solution based on productivity."
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