ARGENTINA expects to scrap its dual exchange system within
five months, doing away with a fixed dollar rate of 1.4 pesos and leaving the
currency to float on exchange markets, President Eduardo Duhalde said
The move has been recommended by the International Monetary
The government last week scrapped the 11-year-old parity
between the peso and the dollar and floated the national currency on the open
market, while at the same time setting a fixed dollar rate of 1.4 for certain
However, the currency quickly fell and Argentinians buying
dollars on the free market had to pay 1.7 pesos.
The president also confirmed that restrictions on bank
withdrawals would be eased this week, although he did not specify how. The
government has already made it clear that there is not enough money to lift
the 1,500-peso cap on monthly withdrawals from current accounts.
Funds worth $65 billion before the government abandoned the
peso-dollar parity have been frozen in Argentina's banking system since the
restrictions were adopted on December 3 to avoid a a flight of capital.
The government claims it will shortly present a sustainable
economic development plan and is confident it will be enough to persuade the
IMF to offer fresh financial aid.
But Mr Duhalde stressed the programme would be based on the
defence of Argentina's interests, particularly in trade and business.
He said: "We will go with our own development plan to
defend the little we have left."
The IMF responded yesterday saying: "We are ready to
help. The international community has every interest in seeing Argentina get
out of this critical situation."
Adapted from The