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ECONOMY | 29-07-2019 19:02

Alberto Fernández says he would stop paying Central Bank interest on Leliqs

The Frente de Todos presidential candidate said he would cease interest payments on notes known as Leliqs, used to implement monetary policy, in order to raise retiree pensions by 20 percent once he takes office.

Presidential candidate Alberto Fernández has said his government would stop paying interest on Central Bank notes if he wins this year’s elections.

Fernández would cease interest payments on notes known as Leliqs, used to implement monetary policy, in order to raise retiree pensions by 20 percent once he takes office December 10, according to an interview that aired Sunday.

“We’re going to stop paying the interest on Leliqs that Argentines are paying for every day,” Fernández told local outlet El Destape in an interview. Local daily Clarín reported his comments Sunday evening.

His remarks come two weeks before a primary elections to be held August 11, which will signal how Argentines plan to vote on October 27.

Fernández, running alongside former president Cristina Fernández de Kirchner, has given few specifics on economic plans.

Argentine policy makers have used the Leliq rate to fight double-digit inflation since October. The Central Bank sets its benchmark interest rate every day based on two auctions of the seven-day notes. The benchmark rate Friday closed at 59.6 percent, the world’s highest.

Yet one of Fernández’s top economic advisers said the presidential candidate was referring to lowering the rate in order to reduce interest payments rather than stop paying them.

“The interpretation of default is wrong,” Matías Kulfas said by phone. “Alberto never mentioned a default.”

- Bloomberg

 

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