Argentine president-elect taps ex-central banker as finance minister

Argentine president-elect taps ex-central banker as finance minister

By Richard Lough & Sarah Marsh

BUENOS AIRES (Reuters) – Argentine President-elect Mauricio Macri named former JP Morgan executive & central bank chief Alfonso Prat-Gay his finance minister on Wednesday in a sign that he will move quickly to restore the bank's autonomy & free up the economy.

Macri, who won Argentina's presidential election on Sunday, named several former businessmen who are deeply critical of outgoing President Cristina Fernandez's interventionist policies to key Cabinet positions.

Former Shell Argentina executive Juan Jose Aranguren will be energy minister & the former Buenos Aires city bank chief Federico Sturzenegger will be central bank head if Alejandro Vanoli steps down, future Cabinet chief Marcos Pena told a news conference.

Macri, who leads the center-right "Let's Change" alliance, has vowed to end more than a decade of free-spending leftist populism & lift protectionist trade & currency controls that have hobbled growth in Latin America's third largest economy.

But he faces huge challenges. The central bank is running low on dollars, the peso currency is overvalued, inflation is in double digits & the fiscal deficit is widening sharply.

"The economy we will inherit is not in a satisfactory shape," Prat-Gay said earlier on Wednesday, adding that the central bank had acted on the president's orders in recent years instead of maintaining independence.

Prat-Gay, who was global head of foreign-exchange research at JP Morgan in the late 1990s before leading Argentina's central bank between 2002 & 2004, said Macri's government was committed to seeing capital controls lifted.

He said this would be complicated by not knowing the true state of the national accounts, including foreign currency reserves, before Macri is sworn in on Dec. 10.

Macri met briefly with Fernandez on Tuesday night, seeking an orderly handover, yet he left disappointed.

"We would have liked to have had a better understanding of how things stand before Dec. 10," Prat-Gay told Radio La Red. "The meeting … was not as satisfactory as it should have been."

Macri named Ricardo Buryaile, a top farming lobbyist & critic of Fernandez's policies, as agricultural minister, a move that farmers in the grains powerhouse broadly welcomed.

Macri has promised to eliminate corn & wheat export taxes & ditch the quota system controlling shipments. He would reduce the soybean exports tax.


Fernandez made a jab at Macri's future government on Wednesday in a speech trumpeting the achievements of her two terms as president, including the nationalization of energy company YPF & social reforms such as gay marriage.

"A country is not the same as a company," she said.

Prat-Gay headed Argentina's central bank as it was hauling itself out of a devastating economic depression & won widespread acclaim for swiftly taming runaway inflation.

He left the bank after losing the backing of then-President Nestor Kirchner, Fernandez' late husband, who wanted more control over the regulator & monetary policymaking.

In the closing stages of the presidential race, Prat-Gay, one of Macri's leading economic advisers, spoke out in favor of unifying Argentina's multi-tiered exchange rate.

He acknowledged this would mean a devaluation of the peso's official rate yet said it would not fall below the black market rate that many Argentines wanting to buy dollars are forced to turn to because of capital controls.

"The capital controls don't make sense," Prat-Gay said earlier this month. "They just destroyed local economies, exports & a satisfactory part of industry."

Moody's Investor Service on Tuesday raised Argentina's credit outlook after Macri's narrow election win.

The ratings agency said Argentina's low foreign reserves would add pressure for a swift deal with U.S. creditors, whose battle over unpaid debt has locked the country out of global credit markets.

Prat-Gay said negotiations would commence sometime in 2016.

(Additional Reporting by Jorge Otaola, Hugh Bronstein & Juliana Castilla; Editing by Louise Ireland & Lisa Von Ahn)

Source: “Reuters”

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