Updated 04:52 AM EST, Sun, Nov 17, 2019

Argentina's President-Elect Mauricio Macri Pressures Central Bank Head Alejandro Vanoli to Resign?

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Alejandro Vanoli, the head of Argentina's central bank, resigned this week under strong pressure from president-elect Mauricio Macri.

Hours before Macri officially assumes the presidential seat, Vanoli announced his resignation in a letter issued to outgoing President Cristina Kirchner, who believes in heavy state controls, Yahoo! News reported. Vanoli's resignation comes four years before the end of his term.

"I am taking this decision in the context of the election result and after some deep reflection, with serenity and the spirit of having demonstrated and defended my commitment to our country and our people," he said, as quoted in Yahoo! News' report.

Vanoli served as the central bank chief since October 2014, the news outlet added. He previously said that he would not leave his position amid Macri's overhaul of economic policies allowing the peso to float, which would result to a sharp devaluation of the currency.

"An objective analysis of our reserves and other relevant indicators show that an abrupt devaluation is not an inevitable course that the national economy needs to follow," he wrote in his letter, as reported by Yahoo! News. "On the contrary, if the president-elect -- as his aides have repeatedly said -- decides to force a violent devaluation, it will be exclusively the result of a political decision."

In his year-long service as the central bank chief, Vanoli defended the peso's close ties to the dollar despite the currency trading as much as 50 percent cheaper on the black market, Yahoo! News noted. There are expectations that Macri will propose economist Federico Sturzenegger to fill Vanoli's vacated position. Sturzenegger is a legislator, former president of Bank Ciudad, and former Harvard University professor.

The Fiscal Times wrote that Macri urged Vanoli to resign immediately after he won the run-off election on Nov. 22. However, a central bank source claimed that the Fernandez administration pressured Vanoli to delay because it did not want to give a favor to the incoming president. Currency traders said that the resignation was not surprising and would not affect financial markets.

Incoming Finance Minister Alfonso Prat-Gay said that Macri's plans for the currency market will be the highest priority to address after the transfer of power.

"The program to unify the currency market is the first signal for the economy to start to normalize. We're going to fulfill that promise as fast and as exhaustively as possible," said Prat-Gay, as quoted by Reuters.

Current capital controls consist of strict limits on dollar savings, restrictions on imports, and an immense tax on credit card use abroad, the news outlet listed. Prat-Gay did not reveal whether the new administration would undo the controls in a flash or do it gradually.

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