Inside Redrado’s battle for Argentina’s central bank
Redrado’s tenure
The end of the Redrado era: a timeline
The move to grab Argentina’s central bank reserves is the latest in a series of government moves to access cash. With $13 billion of debt to pay this year and a hole in its budget of between $2 billion and $7 billion, the government urgently needs to raise funds.
With no access to the international capital markets until Argentina completes a swap with the holdout investors of its defaulted debt, the government has tried to raise money in several different ways. One avenue was the Venezuelan government, which has bought more than $5 billion-worth of bonds from Argentina since 2005. But with the Venezuelan economy mired in deep recession, the country is no longer able to help its neighbour.
Then in November 2008 the Argentine state nationalized the private pension funds (AFJPs) and got its hands on a pool of Ps80 billion ($20.8 billion). The government said that the move was necessary to shore up pensions, which were losing out as the stock market fell. But analysts argued that it was nothing more than a ploy to ensure that the country could roll over its debt.