MercoPress. South Atlantic News Agency

Argentine Court Overturns Currency Rule

The Supreme Court today overturned a government decree that forcibly converted dollar-denominated bank accounts to the Argentine peso.

The ruling drew hundreds of cheering people to the steps of the courthouse. The high court declared unconstitutional the government decision last year and ordered a $247 million deposit belonging to the provincial government of San Luis be restored to its original dollar value

The ruling is expected to set a precedent for hundreds of thousands of Argentine savers who have been challenging the economic policies of President Eduardo Duhalde in the courts.

As part of January 2002 currency devaluation, Duhalde ordered all dollar deposits converted to pesos at a rate of 1.4 to the dollar. Since then, the peso has fallen some 60 percent to 3.2 pesos to the dollar.

The savings of San Luis province had been frozen as part of a banking freeze imposed in December 2001 by former President Fernando de la Rua in an effort to halt a run on the nation's banks. Hundreds of Argentines gathered outside the Supreme Court in downtown Buenos Aires celebrated the decision, dancing and cheering after news of the ruling spread.

Angry savers have staged daily protests outside many of the country's banks, demanding their accounts be restored to their original dollar value. "Today a new Argentina begins!" shouted one unidentified woman on television after the ruling was announced. "We have justice."

The ruling did not specify how banks will go about converting the bank account back into dollars and did not set a date for doing so.