Top banker resigns over banking curbs

BUENOS AIRES, Argentina -- Argentina's top banker resigned Thursday as building anger over tight banking curbs pushed thousands of Argentines into renewed street protests and the value of the peso slumped to new lows.

Hundreds of small businessmen shouted insults and banged drums in front of banks in Buenos Aires, demanding that government rules barring people from withdrawing their savings be overturned.

Banks took out full-page ads in newspapers to blame the government for financial turmoil that has left the country with a 6-week-old partial freeze on bank withdrawals, 18 percent unemployment and a sharply weakening currency.

The peso, until two weeks ago paired one-to-one with the U.S. dollar, slid to two pesos to the dollar hours after Central Bank President Roque Maccarone resigned over a dispute with the government involving monetary policy.

Maccarone, a protégé of former Economy Minister Domingo Cavallo, had clashed with the government of President Eduardo Duhalde since the peso's devaluation on Jan. 6, local reports said. The dispute reportedly pitted Maccarone against Economic Minister Remes Lenicov over ways to preserve the peso's value.

The Central Bank's vice president, Mario Blejer, succeeded Maccarone. Blejer, a former official with the International Monetary Fund, may prove to be a key figure as Argentina tries to reopen multilateral credit lines worth $15 billion.

IMF spokesman Thomas Dawson congratulated Blejer on his appointment and described him as "someone we look forward to working with."

Duhalde, who took office Jan. 2, ended Argentina's decade-old policy of pegging the peso's value at parity with the dollar, devaluing it to 1.4 per dollar for most business transactions. The currency now floats freely for ordinary transactions -- a policy that has made the Central Bank chief an important figure in economic recovery plans.

The Central Bank currently has sole control over Argentine monetary policy. As a result, its success in keeping the currency on an even keel and halting a slide back to the hyperinflation of the 1980s will make or break efforts to save South America's No. 2 economy from all-out collapse.

The IMF shut off a crucial $1.3 billion in bailout aid in December after Argentina failed to meet budget-cutting targets. The loss of aid hastened Argentina to announce days later that it was suspending payments on its bloated $141 billion public debt.

But the banks, along with Duhalde's government, remained the focal point of anger as Argentines demanded greater access to their savings.

The banking curbs were imposed Dec. 1 by then-president Fernando de la Rua to halt a run on the banks -- nearly freezing up a banking system largely dominated by foreign financial institutions, including Citibank and BankBoston.

Some $2 billion in deposits were yanked from the banks on the last banking day in November, before the freeze. Late Thursday, the government announced measures to slightly relax the banking curbs, allowing depositors to move up to $5,000 to peso accounts, but at the official rate of 1.4. That could amount to losses for many savers in dollars, since the peso floats on the open market for most day-to-day transactions.

On Thursday, police searched several branches of foreign-owned banks on the orders of a federal judge who is probing accusations that some customers were allowed to send billions of dollars overseas, leaving bankers unable to pay millions of regular depositors.

There was no letup to angry protests over the banking freeze, joblessness and rising poverty.

Vandals ransacked a town hall Thursday in northern Argentina, a day after a "mock crucifixion" by a priest who hung on a cross demanding help for the poor. In central Cordoba, hundreds of the unemployed threw up road blockades and burned tires. Riot police patrolled marches by farmers in the cities of Rosario and Corrientes. Some 200 employees of Lenicov's Economy Ministry massed outside his office Thursday demanding their unpaid holiday bonus.

Argentines, worried about their economic stability, sought refuge in dollars, pushing the peso's value to record lows. The peso was trading at a mid-rate of 2.05 to the dollar, sharply weaker from its 1.85 close Wednesday.

"There's no government plan for recovery, our money is trapped in the bank, and people are getting angrier and angrier," said Roberto Converti as he waited to buy dollars.