July 29, 2019 / 3:05 PM / 3 months ago

Argentina's leading opposition candidate wants lower rates on central bank notes

BUENOS AIRES, July 29 (Reuters) - The leading opposition candidate in Argentina’s October presidential election wants the central bank to lower interest rates on its short-term notes, according to an interview broadcast late on Sunday. Peronist Alberto Fernandez, who is running with previous Argentine leader Cristina Fernandez as his vice presidential candidate, told local news site El Destape that money paid to holders of seven-day central bank “Leliq” notes would be better spent on benefits for inflation-hit workers and retirees.

“We are going to stop paying the Leliq rates that Argentina is currently paying out every day,” Alberto Fernandez said. “Macri extinguished the Argentine economy, and we have to revive it by putting money in the pockets of workers and retirees.”

With the economy in recession and inflation galloping at more than 50 percent per year, the average rate paid by Leliq notes issued by the central bank on Friday was 59.587 percent.

Fernandez also indicated he would like to see further weakening of the local peso currency, which has already fallen more than 14 percent so far this year to 43.79 per U.S. dollar.

“This is not the real value of the dollar, and they know it. They are obliging us to live with a cheap dollar while we pay exorbitant interest rates that hurt the economy,” he said.

A weaker peso could generate employment by bolstering manufacturers who get paid for their exports in U.S. dollars.

The election is seen as a referendum on incumbent President Mauricio Macri’s painful government spending cuts to reduce the fiscal deficit. Opinion polls analyzed by Reuters this month showed the election would likely go to a runoff with no clear winner emerging from the first-round vote on Oct. 27.

To prevail in the first round, candidates need to obtain 45% or above of the vote or 40% with at least a 10-point lead over second place. A runoff vote would be held in November. (Reporting by Eliana Raszewski; editing by Gabriel Burin; writing by Hugh Bronstein; editing by Jonathan Oatis)

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