June 15 (Bloomberg) -- Argentina will likely move to lift capital controls following the conclusion of the country’s $18.3 billion debt swap, the head of the Buenos Aires Stock Exchange said.
The central government and opposition leaders will support the plan to have the Economy Ministry lift restrictions put in place in 2005 in a bid to attract greater investment, said the exchange’s President Adelmo Gabbi.
“We believe that after the swap, the government will undertake policies to attract foreign capital and the first step should be to lift all barriers,” Gabbi, 66, said in an interview in his Buenos Aires office today. “It’s indispensable to clear the road so that international investors begin to look at Argentina again.”
Under regulations put in place under then-President Nestor Kirchner, international investors must deposit 30 percent of the funds they bring into Argentina with the central bank for a year. The move prompted MSCI Inc. to remove South America’s second-biggest economy from its benchmark emerging-market index in June 2009, assigning it frontier status along with the world’s least developed markets, including Bulgaria and Kenya.
An Economy Ministry spokeswoman didn’t return a phone call from Bloomberg News seeking comment. President Cristina Fernandez de Kirchner said in an Aug. 27 speech at the stock exchange that the measures introduced by her husband helped protect the economy from turbulence in the wake of the global financial crisis.
‘Political Year’
Gabbi said he’s confident that restrictions will end because the government will want to boost investment to help energize the economy ahead of the 2011 presidential election.
“We are entering into a political year and the government needs an inflow of capital to improve the situation and get more votes in the next election,” Gabbi said.
Argentina will close on June 22 an offer to restructure $18.3 billion in defaulted bonds that weren’t tendered in a 2005 exchange. Economy Minister Amado Boudou has said that a successful swap will help the country regain access to international credit markets and lower borrowing costs for provinces and companies that seek to sell debt.
Argentina’s Merval stock index, which rose 1.6 percent to 2,319.47 as of 3:13 p.m. New York time, is little changed this year after surging 115 percent in 2009. A return to emerging market status from “frontier” status could bring back as much $10 billion in foreign funds to the market, Gabbi said.
To contact the reporters on this story: Eliana Raszewski in Buenos Aires at
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; Drew Benson in Buenos Aires at
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source: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a40G.VMqvn28
