Economy Minister at the Senate defends use of Central Bank reserves
Economy Minister Amado Boudou is speaking before a Senate committee to justify use of the central bank reserves to repay debt, among other issues.
Boudou defended the use of reserves at the time that ruled out an adjustment.
“The chances are lowering pension funding, curbing public works, borrowing at high rates or using excess reserves. We will not adjust in any way,” he said.
The minister explained the 2006 payment in advance of all debt with the IMF, “this fact was important from an economic point of view but had a strong political effect. At that time, 30% of total reserves of the BCRA were used or 100% of freely available reserves. It was the maximum possible utilization of the reserves of free access. The payment represented a strong policy of debt reduction with genuine resources.”, and added “clearly demonstrated the benefits of debt reduction.”
As the Minister was speaking at the Senate, it was known that the Fourth Panel of the Federal Administrative Court of Appeals, struck down on Tuesday an injunction that had blocked the government from using central bank reserves.
The Government and the opposition, and the Judicial Branch have been in a three-way battle over a controversial presidential drive to use the reserves to pay debt as the government faces tight financing this year.