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Monday, 21 January, 2002, 23:40 GMT
Argentines angry at peso conversion
March in Buenos Aires; banner says 'Judgment and Punishment'
The measures will widen the gap between rich and poor
Argentines have reacted with hostility to the government's announcement that all US dollar bank accounts will be turned into the local currency, the peso.

The government said the conversion would be at the official rate of 1.40 pesos to the dollar - well under the street value of around two pesos.

Local newspapers accused President Eduardo Duhalde of breaking an inauguration pledge to protect the value of people's savings, following the country's economic crisis.

Eduardo Duhalde
Mr Duhalde is accused of breaking a pledge to protect people's savings
The BBC correspondent in Buenos Aires says the effect will be to widen still further Argentina's considerable wealth gap; the rich, who sent billions of dollars abroad as the crisis loomed, can now buy far more in Argentina as a result of the devaluation.

In his inauguration speech at the beginning of this month, President Duhalde had promised that people with bank accounts in US dollars would eventually get their money back in dollars.

After more than 10 years during which the peso was pegged to the US dollar, more than two-thirds of bank deposits in Argentine banks are in US dollars.

Mr Duhalde, Argentina's fifth president in the past month, devalued the peso earlier this month, days after the country defaulted on its $141bn debt.

Violent protests last month led to the collapse of two governments.

In recent weeks, a number of peaceful demonstrations have ended in clashes between police and protesters who smashed banks and store windows.

Banking restrictions

At the end of last week, President Duhalde outlined measures to ease restrictions on some banking operations.

There are almost $45bn in bank accounts in Argentina, but the government has less than half that amount in its reserves, which is why restrictions on bank withdrawals are necessary.

Argentina in crisis
Early in December, IMF refuses to disburse $1.3bn aid
20 December 2001: President de la Rua resigns after riots
23 December: Adolfo Rodriguez Saa sworn in
30 December: Mr Rodriguez Saa resigns
1 January 2002: Eduardo Duhalde elected new president
Some have expressed fears that lifting these restrictions could see the peso slide even further, leading to inflation.

However, so far prices have hardly risen since the devaluation.

Argentines can now move as much as $5,000 from dollar savings accounts to peso accounts at the rate of 1.40 pesos to the dollar.

Operations with cheques and debit cards have also been made easier.

But citizens are still unable to cash the money, and the banks will no longer give out US dollars.

The BBC's Lourdes Heredia:
Argentines are resorting to bartering
The BBC's Tom Gibb in Buenos Aires
"Much of the public anger is directed towards the banks"
The BBC's David Willis
"The hardest part is denying a child that is hungry"
See also:

17 Jan 02 | Business
Argentina receives debt lifeline
15 Jan 02 | Business
Why Argentines take sleeping pills
14 Jan 02 | Business
Argentina seeks IMF olive branch
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