Ex-Ar­gen­tine leader Fer­nan­dez in­dicted in cen­tral bank case

Pakistan Observer - - INTERNATIONAL -

BUENOS AIRES—For­mer Ar­gen­tine Pres­i­dent Cristina Fer­nan­dez has been in­dicted over ac­cu­sa­tions that she over­saw ir­reg­u­lar­i­ties in the cen­tral bank’s sale of U.S. dol­lars in the fu­tures mar­ket while she was in of­fice.

Fed­eral Judge Clau­dio Bona­dio charged Fer­nan­dez, her for­mer econ­omy min­is­ter Axel Ki­cillof and for­mer cen­tral bank chief Ale­jan­dro Vanoli with “un­faith­ful ad­min­is­tra­tion to the detri­ment of public ad­min­is­tra­tion,” ac­cord­ing to court pa­pers.

The rul­ing, which gives a green light for pros­e­cu­tors to put Fer­nan­dez on trial, may be ap­pealed. There was no ar­rest war­rant. The ac­cu­sa­tion is that the cen­tral bank took bil­lions of dol­lars worth of money-los­ing po­si­tions in the fu­tures mar­ket ahead of a widely ex­pected de­val­u­a­tion of the Ar­gen­tine peso.

Fer­nan­dez, who heads a large fac­tion of the Pero­nist party, stepped down in De­cem­ber at the end of her se­cond term.

Her suc­ces­sor, Mauri­cio Macri, won the pres­i­dency on a plat­form of ditch­ing cur­rency con­trols that he said were stran­gling the econ­omy. Since lift­ing the con­trols in mid-De­cem­ber the peso has weak­ened by about 30 per­cent to 14.1575 per U.S. dol­lar.

Fer­nan­dez last month ac­cused the Macri govern­ment of po­lit­i­cal per­se­cu­tion af­ter tes­ti­fy­ing in court about the cen­tral bank’s dol­lar-buy­ing op­er­a­tions.

The trans­ac­tions re­ferred to in the case in­volved $5 bil­lion to $17 bil­lion, ac­cord­ing to court pa­pers pub­lished by Ar­gentina’s Ju­di­cial In­for­ma­tion Cen­ter (CIJ).

“It’s im­pos­si­ble to be­lieve that a fi­nan­cial op­er­a­tion of this size ... could have been car­ried out with­out the ap­proval of the high­est ex­ec­u­tive level of the na­tional govern­ment,” the rul­ing said.

Fer­nan­dez is revered by mil­lions for the gen­er­ous wel­fare pro­grams she of­fered while in of­fice and re­viled by oth­ers for eco­nomic poli­cies such as na­tion­al­iz­ing busi­nesses and plac­ing heavy­handed econ­omy.

“The in­dict­ment was not un­ex­pected, but po­lit­i­cally, it cre­ates noise,” said Ig­na­cio Labaqui, who analy­ses Ar­gentina for emerg­ing mar­kets con­sul­tancy Med­ley Global Ad­vi­sors. “Pero­nism is go­ing through a lead­er­ship cri­sis and this could make the di­vi­sions within the party more acute.” The in­dict­ment of Fer­nan­dez came a day af­ter the pres­i­dent of neigh­bor­ing Brazil, Dilma Rouss­eff, was sus­pended from of­fice by the Se­nate while she is tried on charges of break­ing bud­get rules.—Reuters con­trols on the

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