UPDATE 1-Argentine Central Bank standoff shifts to Congress

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* Congress commission meets, recommendations non-binding

* Summons economy minister, central bank officials

* President pushes for swift debate, defends reserves plan
(Recasts with officials summoned, adds president’s quotes)

By Helen Popper

BUENOS AIRES, Jan 26 (BestGrowthStock) – An Argentine congressional
commission summoned top economic officials on Tuesday as it
debates the president’s firing of the central bank chief in a
row over using foreign reserves to pay debt.

The commission’s decision is non-binding, but President
Cristina Fernandez wants it to give its opinion quickly to end
a crisis at the Central Bank that has rattled financial markets
and raised concerns a planned debt swap could be delayed.

“For there to be certainty about Argentina, the commission
must reach a conclusion on the removal of the former president
of the Central Bank this week,” said Miguel Angel Pichetto,
head of the ruling party bloc in the Senate.

Pro-government bank directors have already appointed a new
interim Central Bank president, Miguel Pesce, who had been the
bank’s vice president, to replace Martin Redrado. Redrado, who
was barred by police from entering the bank’s premises on
Sunday, says he remains president.

But even opposition leaders who welcomed Redrado’s refusal
to transfer central bank reserves to the Treasury have joined
the government in calling for him to step aside in order to end
the leadership crisis at the bank.

The row over using $6.6 billion in foreign reserves to pay
debt has shaken markets and highlighted political uncertainty
in Latin America’s No. 3 economy just as Fernandez’s
administration seeks to charm investors with a $20 billion swap
of defaulted bonds.

The special congressional commission is made up of
opposition deputy Alfonso Prat-Gay and ruling party lawmaker
Gustavo Marconato. The commission is presided over by Vice
President Julio Cobos, who split with the government and is now
a leading government critic.

They summoned Economy Minister Amado Boudou and the Central
Bank’s Pesce, seen as a government ally, on Tuesday and asked
Redrado to appear on Wednesday.

It is not clear how long it will take for the commission to
reach its conclusions.

The government is pushing for the process to be wrapped up
within days rather than weeks. Prat-Gay, however, said the
commission would take all the time it needed.

“The president was the one who took two weeks trying to
fire Redrado by decree when she wasn’t allowed to. … If the
government’s in a hurry now, they should look at their own
responsibility,” he said.

RESERVES FUND

Fernandez, in an effort to defuse the deepening political
and legal battle, asked lawmakers to debate the presidential
decree that fired Redrado.

Last week, a court ruled that Congress must give its
opinion on Redrado’s fate before a new, permanent head of the
bank could be appointed.

It also upheld a previous ruling that blocked the transfer
of reserves to the Treasury, but Fernandez vowed to press on
with her drive to tap part of the central bank’s $48 billion in
reserves to meet debt payments of some $13 billion this year.

The reserves fund, “with which we’re going to forge ahead
with across the country, will allow us to keep on growing
without taking on debt at usurious interest rates,” Fernandez
said.

Some economic analysts have suggested the battle over the
reserves fund could delay the government’s planned debt swap,
which is expected to launch in the coming weeks. Government
ministers say it remains on track.

Argentina’s government hopes the exchange of bonds left
over from its massive 2002 default will allow the country to
return to global credit markets after eight years.

Fernandez accused opposition leaders of trying to sabotage
the planned debt operation. “This is what they want for this
swap; they want it to fail so we again have to take loans at
rates of 17 or 18 percent,” she said in a speech.

Opposition leaders say Fernandez wants to use the reserves
to help free up government resources to increase social
spending and boost her languishing popularity ratings in the
run-up to next year’s presidential election.

Investment

(Additional reporting by Guido Nejamkis and Juliana Castilla;
Editing by Leslie Adler)

UPDATE 1-Argentine Central Bank standoff shifts to Congress