* Excess foreign reserves may finance public investment
* Currency controls will not be loosened - Marco del Pont
* Banks must comply with lending requirements
BUENOS AIRES, Dec 23 Argentina's economy is seen
growing 4.6 percent next year, improving after drought and a
slowdown in top trading partner Brazil took a toll in 2012, the
central bank president said in an interview published on Sunday.
The expansion in Argentina, Latin America's No. 3 economy,
cooled abruptly this year, ending a boom period that started in
2003 when the country began recovering from a crippling crisis
and the world's largest-ever sovereign debt default.
"We're expecting a good 2013 with growth in economic
activity of 4.6 percent and investment that will end the year at
24 percent of GDP (gross domestic product)," central bank chief
Mercedes Marco del Pont told Argentine newspaper Pagina 12.
In a report released late on Friday, the central bank
estimated 2012 growth at about 2 percent. This confirms private
predictions that growth will be below the 3.26 percent threshold
that would trigger roughly $4 billion in payments next year on
growth-linked GDP warrants.
The warrants, securities issued as a deal sweetener during
the country's 2005 and 2010 debt restructurings, only pay out
when annual growth tops a certain threshold. The payment is made
in December of the following year.
Argentina's 2013 budget earmarked $7.97 billion in central
bank foreign reserves to pay debt next year. But Marco del Pont
acknowledged that without payments coming due on the GDP
warrants, there will be excess funds.
"There's a surplus foreseen in the budget. What is not paid
on the GDP warrants will be able to go towards public
investment, as long as this has a neutral monetary impact,"
Marco del Pont was quoted as saying.
Argentina has no inflation-targeting regime and a central
bank charter reform approved by Congress in March expanded the
bank's mandate to include financial stability and "economic
development with social justice."
Marco del Pont rejects orthodox explanations of price rises
and defends the strong expansion of money supply by saying it
reflects greater demand for Argentine pesos in a growing
She also said "there will be no loosening" of strict
currency controls in place since October 2011. Individual savers
are only allowed to buy foreign currency now when they travel
abroad, which has sent the black-market rate for dollars soaring
in a country where people often seek refuge in greenbacks.
She said the money that Argentines used to hoard in dollars
should be channeled into productive investments. Before the
controls were imposed, Marco del Pont said at least $1 billion a
month were purchased on the local foreign exchange market.
With regard to new requirements that banks lend the
equivalent of 5 percent of their deposits to companies - a
policy first implemented in the second half of 2012 - Marco del
Pont said sanctions will be used to force compliance.
"Banks that don't comply with the objective this year will
have the difference 100 percent immobilized in an account at the
central bank" and returned over time once the bank lends the
full amount, she said.