January 24, 2010 / 3:12 PM / 10 years ago

Argentina central bank chief vows to stay on

BUENOS AIRES, Jan 24 (Reuters) - The embattled head of Argentina’s Central Bank said on Sunday he would stay in his job despite a new legal ruling that the government said meant he had to leave.

President Cristina Fernandez fired bank chief Martin Redrado earlier this month because he opposed her plan to use $6.6 billion in foreign currency reserves to pay debt, but a court ordered his reinstatement a day later.

Another court ruled on Friday that Congress should decide whether Fernandez was right to fire Redrado [ID:nN22166838], but government ministers interpreted the ruling as also saying he had to quit.

“I maintain my decision to continue carrying out my duties as an official unless Congress says otherwise in order to comply with the law and my convictions,” Redrado wrote in a letter published in daily La Nacion.

Friday’s court rulings dealt another setback to the cash-strapped government’s plan to tap central bank reserves, upholding an earlier court freeze on the transfer of funds to the Treasury.

“One of the fundamental duties of the Central Bank is to protect the foreign reserves, which aren’t savings in the conventional sense, but rather a guarantee of monetary, financial and exchange rate stability,” Redrado wrote.

Late on Friday, Cabinet Chief Anibal Fernandez said Redrado would not be allowed to continue working at the bank and the bank’s pro-government board of directors named Vice President Miguel Pesce as Redrado’s replacement.

Constitutional experts and lawmakers from both the ruling party and opposition also said the latest ruling meant Redrado should step aside.

Fernandez had already named Pesce as Redrado’s replacement before the federal court overruled her.

A special congressional commission was due to meet next week to discuss Redrado’s fate, but Fernandez has stressed that any recommendations it makes are nonbinding.

Fernandez’s push to tap part of the country’s $48 billion in foreign currency reserves has raised political tension in Latin America’s No. 3 economy, rattling financial markets and raising concerns a planned $20 billion bond swap could be delayed. (Reporting by Walter Bianchi; Writing by Helen Popper; Editing by Maureen Bavdek)

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