By Jude Webber in Buenos Aires
The gospel according to Argentina goes something like this: thou shalt not default.
According to former central bank chief Martín Redrado, Argentina may be in no position to dish out recommendations to the likes of Greece, but if there is one thing it learned in its 2001 crash – the biggest sovereign default in history on nearly $100bn – it is this: default is not an option.
Argentina knows first-hand the pain involved in bailing on creditors and a disorderly exit to a fixed currency regime. The cost was economic and social chaos and it is still paying the price.
Speaking to Bloomberg Television in London, Mr Redrado said markets remained sceptical about relying on fiscal adjustment and so Greece should reschedule debt in a market-friendly way. He also noted how Latin America had moved from fixed to flexible currency regimes and was now a “beacon of stability and growth” in emerging markets. He said: Read more
I called the end too soon. The Argentine central bank fiasco has clearly outlived Martín Redrado stepping aside. In an unexpected twist, a presidential ally was chosen to head the country’s central bank.
From tomorrow’s paper… Read more
After weeks of acrimonious fighting, Martín Redrado, the central bank president who President Cristina Fernández has been attempting to fire , accepted defeat.
Some background for those who haven’t been following the saga:
The dispute started last month, when Mr Redrado refused to hand over $6.5bn to help pay off government debt after an emergency decree from Ms Fernández. Mr Redrado argued that the move could leave the central bank open to suits from bondholders who are still trying to get paid back after Argentina’s $100bn default.
So, earlier this month, Ms Fernandez released another emergency decree: this time sacking Mr Redrado.
Problem was, Mr Redrado won’t comply with that decree either. Read more
By Jude Webber, Argentina correspondent
Will the real president of Argentina’s central bank please step forward. Read more