By Karin Strohecker
WASHINGTON (Reuters) -Argentina’s Deputy Central Bank Governor Vladimir Werning said on Wednesday he expected the peso currency to hit the lower end of its recently implemented trading band.
“(In) all successful emerging market stabilization programs, at the end of the day, you have a stronger currency,” said Werning, speaking at a conference of the Institute of International Finance on the sidelines of the IMF/World Bank Spring meetings in Washington.
Argentina this month abandoned a crawling peg to the U.S. dollar on its peso currency in favor of a constantly-widening trading band.
“For us, it’s a very good process, and we expect the currency to hit the lower band,” Werning said.
Werning added that this posed an interesting monetary policy dilemma, and the bank stood ready to purchase at that point in time all the dollars in excess that are making the local currency stronger and issue pesos.
He also noted that spreads on Argentina’s debt – or the premium demanded by investors to hold the bonds – are tightening, though he said the government was in no rush to tap capital markets.
“At reasonable spread levels,” he said, the country could “roll-over debt, and that would relieve an additional pressure we’re still working with. But we’re not in a rush to go to market.”
(Reporting by Karin Strohecker and David Lawder; editing by Rodrigo Campos and Sonali Paul)
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