BUENOS AIRES, Oct 2 (Reuters) - Argentina’s Cabinet Chief Jorge Capitanich on Thursday ducked questions about the direction of monetary policy after the appointment of a new central bank governor viewed as sympathetic to the government’s interventionist stance.
Alejandro Vanoli takes over the central bank at a time Latin America’s No. 3 economy is grappling with shrinking foreign reserves, runaway consumer prices and a tanking currency after defaulting on its debt again in July.
He has lately defended the ramping up of state controls in the economy designed to bolster consumer demand and protect reserves that stand at $27.9 billion, roughly 4 1/2 months’ worth of import cover.
His appointment, which followed the resignation of his predecessor Juan Carlos Fabrega on Wednesday, has raised questions over the central bank’s independence and the policy path it will take.
Capitanich was asked twice in his daily press conference whether the departure of Fabrega, who had pushed for tighter anti-inflation measures but ran up against the pro-growth economy ministry, would mark a shift in monetary policy.
“Naturally he must comply with the bank’s charter, and that means pursuing a strategy that conforms with monetary targets and which also creates an environment that is favourable and which stimulates economic activity, employment and investments,” Capitanich said.
Vanoli’s nomination was published in the Official Gazette on Thursday and will now be submitted to Congress, though this is a formality and does not stand in the way of the former market regulator taking oath and beginning his duties.
Local market players expect Vanoli to deepen currency and trade controls to stem the flight of capital that is threatening already-sapped foreign reserves and has sharply widened the margin between the official exchange rate and black market rate. (Reporting by Richard Lough and Jorge Otaola; Editing by Chizu Nomiyama)