Argentine President Removes Besieged Central Bank Chief

President Fernando De la Rua named a new president for the powerful central bank Wednesday, effectively removing the beleaguered chief.

It was the latest chapter in Argentina’s economic and financial crisis, which has spooked global investors and raised fears that the country could default on its $128 billion in debt.

Pedro Pou’s post was declared “vacant,” and Roque Maccarone was named interim president. The appointment requires approval from a Senate committee, but ratification was considered virtually assured.

Pou, head of the central bank since 1996, had been locked in an escalating feud with Argentina’s new economy minister, Domingo Cavallo. On Tuesday, a congressional committee accused Pou of failing to crack down on financial irregularities.

Cavallo was known to oppose Pou’s approach to monetary policy. He publicly blamed the current 33-month recession on Pou’s failure to loosen liquidity requirements for banks, saying the policy prevented businesses from obtaining much-needed credit.

He also was angered by Pou’s opposition to his controversial plans to peg the Argentine peso to the euro and the dollar, rather than just the dollar.

Maccarone served under Cavallo during Cavallo’s previous stint as economy minister a decade ago.

Earlier Wednesday, Cavallo reiterated that Argentina will not default on its debt. Yields on Argentine bonds dipped slightly in global markets as buyers reappeared. The country’s main stock index inched up 0.1% to 420.78 and other Latin American markets also rose.