Argentine president defends aides, vows to stay course

BUENOS AIRES (Reuters) - Argentine President Cristina Fernandez, who has spent most of her first eight-months in office in a deep political crisis, defended her administration on Saturday and ruled out further cabinet changes.

Despite rising prices topping Argentines' concerns Fernandez indicated she would stay the course with economic policies such as foreign exchange controls that have made exports competitive but critics say have stoked inflation.

Fernandez was forced last month to ditch a controversial tax increase on soy exports and replaced her cabinet chief and agriculture secretary after a bitter four-month stand-off with farmers ended when senators rejected the tax.

"No," she said when asked whether she would make more changes in her cabinet.

The rare news conference, her first since succeeding her husband, Nestor Kirchner, as president in December, marked a change of style for the combative Fernandez, who has stoked anger with her harsh rhetoric against the farm sector.

Argentina's first elected woman president said her only mistake was to underestimate the fierce opposition she would encounter from big business in the agricultural sector.

"I would do each and every thing that I did again," Fernandez said. "I would push resolution 125 (which raised the tax). For the first time in Argentina since the advent of democracy ... we have seriously discussed ... a law that for the first time addressed redistribution of revenue."

The center-left leader said she would continue to fight for fairer wealth distribution in Argentina, South America's No. 2 economy, where a quarter of the population lives in poverty.

Argentina's economy has seen five years of robust expansion, but high inflation and the farm crisis damaged the country's stocks and bonds and hit consumer confidence.

Official numbers showing the consumer prices index rising about 9 percent annually have been widely discredited and private estimates put inflation at higher than 20 percent.

Fernandez defended official price data, saying any methodology can be questioned. She noted that Argentines are better off than people in neighboring countries, where she said wages are lower but food and fuel prices are higher.

"This news conference is not enough to confirm any substantial changes in the government," said political analyst Rosendo Fraga. He noted that Fernandez is still in conflict with her own vice president and governors from rural provinces who opposed the soy tax.

POWER COUPLE

Fernandez also backed her controversial domestic commerce secretary, Guillermo Moreno, who is widely accused of undermining inflation data.

Political opponents have called for wider changes in the cabinet, and especially for Moreno to be replaced to restore the credibility of statistics agency INDEC.

"Why are officials always being demonized?" Fernandez asked at the news conference in the presidential residence.

Despite the crushing defeat of her soy tax, which she had made the centerpiece of her policy, Fernandez has retained hard-liners inherited from her husband's cabinet.

Fernandez, who was a high-profile senator, ridiculed speculation that her husband is the power behind the throne, recalling that when he took office in 2003 there was a lot of talk that she would be the one calling the shots for him.

"We've just been working together for a long time with the same ideas on how to improve Argentina," she said.

A poll by Poliarquia consulting firm published in La Nacion newspaper showed Fernandez is beginning to recover from the farm conflict. It said 31 percent of Argentines have a positive image of the president, up from 20 percent in June when the farm conflict was at its worst.

When Fernandez was locked in bitter confrontation with soy growers, polls showed many Argentines found her arrogant and were frustrated with her unwillingness to negotiate.

At the news conference she said her tough stance was justified because of the "virulence" of the farmers' protests, which blocked roads and kept food from markets.

(Additional reporting by Cesar Illiano and Karina Grazina; writing by Simon Gardner; editing by Chris Wilson)