British Report on Argentine Finances

Grey River Argus, 2 October 1948, Page 3

British Report on Argentine Finances

LONDON, Oct. 1. A correspondent of the Financial Times at Buenos Aires stated: —The Peron Government will shortly be ; compelled to adopt a more accommodating attitude in its overseas trade I dealings. When the new British-Ar-gentine trade agreement is negotiated Britain will find herself in a much stronger bargaining position than hitherto. As a result of capital purchases, debt redemption, and purchase of foreign holdings, Argentine reduced its gold and dollar reserves from 3,600,000,000 pesos in 1946 to 600,000,000 pesos. In addition its sterling reserves are more apparent than real because the majority of them are blocked at London. They are in any case are employed as backing for the Argentine currency. As a result, sterling is fast becoming a hard currency. Argentine must face the fact that the loan of £116,000,000 advanced by Britain at the time of the signing of the Andes Pact must be repaid in less than a year’s time. In addition to mounting difficulties with the sterling area, Argentine’s dollar shortage is so acute that recently the State Central Bank was compelled to suspend arbitrarily all dealings in dollars and to send its president to the United States to endeavour to obtain some relaxation. “To-day pounds and dollars are equally short in Argentine, and it is in these circumstances, very different from those of a year ago, that the new -British-Argentine agreement will have to be negotiated.