The Miami Herald
January 11, 2002

Argentines' deposits frozen for up to 3 years

 Herald World Staff

 BUENOS AIRES -- Insolvent Argentina plunged deeper into crisis Thursday as the government imposed drastic measures designed to prevent the collapse of the banking system by freezing many deposits until next year, and in some cases until 2005.

 The banking restrictions announced Thursday were greeted by a demonstration in front of the Justice Palace. Hundreds of Argentines banged pots and pans to protest a Supreme Court decision that allowed the government to maintain what many Argentines feel is an unconstitutional freeze of their bank accounts.

 In the capital, desperate Argentines expressed frustration and outrage.

 ``There comes a point where people get sick of all this, that they don't care about anything any more. In any moment, everything can explode,'' said Adolfo Marchal, a retired chemist leaving a Citibank branch bank, unable to get information on the status of his account.

 President Eduardo Duhalde, in office since Jan. 2, dispelled rumors sweeping the country that he would resign or be toppled. In a public appearance, Duhalde said he had no intention of resigning.

 For depositors who have checking or savings accounts in dollars and worth $10,000 or more, the government will freeze those accounts until March 2003. After that, their money will be returned to them in 12 monthly installments. For dollar savings worth more than $30,000, money will be returned in 24 monthly installments beginning in September 2003. Those with peso accounts will begin getting access to their savings starting in March, August or December, depending on how much they have saved.

 Meanwhile, Argentine currency markets, shuttered since December 21, will reopen today, with both a floating dollar rate and another fixed at 1.4 pesos, the central bank announced.

 On Thursday, demonstrators cut off traffic on half a dozen main avenues in the capital in the latest of a series of popular protests that have gripped Argentina in the past weeks.

 ``Please, please give us our money back,'' yelled one man, captured on television channel America.

 Others shouted demands that the government call immediate elections and that Duhalde replace the members of the Supreme Court, widely perceived by Argentines to be corrupt.

 In the fashionable Palermo district, dotted by smart shopping malls and the expensive apartments that are home to Argentina's dwindling group of rich and famous, about 2,000 people congregated.

 Fearing that the violence that had accompanied previous protests would repeat itself, authorities strengthened security around the Government House, Congress and other important official buildings.

 For the past decade, Argentina valued one peso on par with one U.S. dollar, and citizens could save in either currency. But Sunday night, Argentina announced a
 twin-exchange rate, fixing government business at 1.4 pesos to the dollar and most other transactions under a free-floating rate set by currency markets.

 The bad news for bank depositors followed word that government spending will fall by $8 billion this year to balance the budget.

 This report was supplemented by Herald wire services.

                                    © 2002