MercoPress. South Atlantic News Agency

Mrs. Kirchner confirms controversial economist as central bank president

Marco del Pont openly supports using international reserves to pay sovereign debt

The Argentine government confirmed Mercedes Marco del Pont as president of the Central bank. She supported and executed the controversial use of international reserves to pay sovereign debt, an issue which forced the ousting of her predecessor in the post, respected banker Martin Perez Redrado.

Economist Marco del Pont took office in February to complete the mandate of Perez Redrado, whom President Cristina Fernandez de Kirchner fired for opposing her plan to pay creditors with reserves.

The Yale-trained Marco del Pont on taking office transferred 6.6 billion US dollars from the Central bank to the Treasury to pay debt, of which 4.7 billion has been used, according to Economy minister Amado Boudou.

A former lawmaker with the ruling Victory Front coalition of the Kirchner couple, Ms Marco del Pont was president of the government’s development Banco Nación when she was first named to the central bank, and still has to be confirmed by the Argentine Senate.

In a March 4 televised speech, Mrs. Kirchner described Marco del Pont as “a respected economist with personal, academic, political and professional aptitudes.”

Most ‘serious’ governments refrain from using international reserves to pay debt because it fuels inflation by freeing up budget money for other expenses, said Claudio Loser, a former International Monetary Fund official who now runs the Centennial Latin America research company based in Washington.

“It is sound economic policy,” Marco del Pont said in defense of the utilization of bank funds at a March 10 Senate hearing on her appointment.

“Marco del Pont has been a soldier of the government” said former Central bank president Alfonso Prat-Gray in a Sept. 16 interview in Buenos Aires. “That’s a violation of the law, which says that the bank should be a soldier of the people.”

The Argentine central bank reserves currently stand at 51.2 billion USD. Mrs. Kirchner plans to tap a further 7.5 billion USD of reserves to pay debt in 2011 revealed Economy Minister Amado Boudou when he presented next year’s budget to Congress last week.