Ex Central Bank chairman Mario Blejer considered a possible resolution to the legal dispute against vulture funds will also improve Argentina''s economic outlook.

Thursday, November 13, 2014

'China swap helped reduce dollar pressure'

Ex Central Bank chairman Mario Blejer considered a possible resolution to the legal dispute against vulture funds will also improve Argentina''s economic outlook.

The swap deal reached with China has allowed to put downward pressure on the informal dollar leading to a significant drop in the American currency parallel rate, former president of the Central Bank Mario Blejer considered.

In statements to media today, the economist highlighted that settling the debt dispute with so called vulture funds – a group of bondholders that refused to enter Argentina’s 2005 and 2010 swaps suing the country for more than 1.3 billion dollars over its defaulted bonds -, will improve the economic scenario.

“If the issue with vulture funds can be resolved, we will be bette. We are under some very important foreign pressure.”

“The international context is not favourable for us,” Blejer warned. “It is true that dollars are missing (…) but if you trust in external resources of other fronts the pressure on the dollar goes down,” he affirmed referring to the swap signed in July with the Peoples Republic of China.

The deal was activated on October 30 with the Central Bank receiving the equivalent of u$s 814 million in yuans, and depositing the same amount in pesos in the Chinese Central Bank.

“They (private-sector analysts) always predict a dollar that will go to 20 pesos but there is an important demand to cover due to the effects of inflation; people know that the dollar always goes up,” Blejer said adding that the government should also focus in long-term agenda on "the way to correct the foreign accounts and the energy deficit."