Argentina to continue forex intervention-cenbanker
Central bank chief says country's 2011 outlook bright * Country will continue measures to protect economy
By: Jorge Otaola
Argentina will continue to protect its booming economy in 2011 by intervening in foreign exchange markets, accumulating foreign reserves and controlling capital flows, the central bank president said on Monday.
Mercedes Marco del Pont has said those mechanisms were adopted as public policies by emerging markets and give Argentina autonomy in the globalized world. [ID: nN02222834]
The South American country has long backed state intervention in the economy to stoke growth and avoid volatility.
President Cristina Fernandez often notes that many other nations adopted similar measures after the global financial crisis hit in 2008.
Speaking at the Thomson Reuters Economic Forum in Buenos Aires on Monday, Marco del Pont said Argentina's economic outlook is bright.
"There's enormous optimism because we know Argentina will continue its high economic growth (in 2011), that it will continue to improve its employment levels and that it will enjoy trade and fiscal surpluses," she told investors and company executives in a teleconference.
"And in that context, the central bank will continue to carry on these policies to keep the exchange rate steady, to accumulate reserves and to avoid ... speculative capital inflows," she added.
Argentina's central bank buys or sell dollars on the local market nearly every day to keep the peso ARSB= steady and to sustain a competitive exchange rate that helps spur exports.
Latin America's third-biggest economy plans to use foreign reserves to pay debt to private investors next year, allowing the state to fund high spending ahead of an October 2011 presidential election.
Marco del Pont said the central bank's role will be key given the global context "where capital flows are provoking a lot of damage -- not only creating a bubble effect but also appreciating currencies."
Argentina is seen growing nearly 9 percent this year, but the government's 2011 budget bill puts next year's expansion at a conservative 4.3 percent.
The government forecasts the trade surplus at $9.68 billion in 2011, below the $12.73 billion estimated for 2010. Inflation is seen at 8.4 percent in 2011, way below private forecasts.
Marco del Pont was confirmed as central bank head in September through a presidential decree. ($1 = 4.0375 Argentine pesos) (Writing by Luis Andres Henao, Editing by Chizu Nomiyama)
External Link: Click here for full article.