MercoPress. South Atlantic News Agency

Peso Holds Firm in Argentina

Argentina's peso held firm against the dollar Monday as banks and foreign currency houses reopened after a weeklong shutdown and as a new economy minister was taking charge.

A flare-up of Argentine's deep-rooted economic crisis threatened to unseat President Eduardo Duhalde's government in recent days, but Duhalde won political backing to continue with his economic rescue plans.

Meanwhile, some small lines formed at banks as reports indicated the peso currency was holding steady at about 3.10 to the dollar. Until a sharp January devaluation the peso had traded at one-to-one with the dollar for 11 years.

Economy Minister Roberto Lavagna planned a news conference later Monday to discuss his first steps to tackle the slumping economy.

A former ambassador to the European Union, Lavagna was expected to discuss efforts to sway the Group of Seven industrial nations to back Argentina's appeal for fresh emergency funds from the International Monetary Fund.

The IMF suspended a credit line worth billions of dollars for Argentine recovery measures last December when the economic crisis exploded into street riots that toppled the government of then-president Fernando De la Rua.

Argentina began its latest round of talks with the IMF in March. But IMF officials have withheld new funds, saying Duhalde must first mount a credible recovery plan that includes budget-cutting by the 23 Argentine provinces.

Lavagna took over the key ministry Saturday, following a dramatic week that saw his predecessor, Jorge Remes Lenicov, resign and efforts to secure international aid to prop up the fragile banking system evaporate.

Banks and foreign-exchange markets resumed full operations Monday. The Central Bank ordered banks to shut down April 19, saying they would reopen only after Congress passed legislation to halt the daily withdrawal of $50 million from the banks.

Last week, lawmakers approved a bill that prevents savers who have won lawsuits against a 4-month-old banking freeze from collecting their deposits until the government can appeal.

Observers say the law will sharply reduce the level of deposits withdrawn in the coming weeks, preventing a possible financial collapse.

A banking freeze was imposed Dec. 1 by the De la Rua government amid a deep economic crisis that later led Argentina to default on its $141 billion public debt and its currency to drop steeply in value.