: IMF'S FOUR STEPS TO DAMNATION
: ---------------------------------------------

Argentina's economy suffers another bad day

By LAURENCE NORMAN, Associated Press

BUENOS AIRES, Argentina
(August 1, 2001 08:02 p.m. EDT ) - The troubled economy of Argentina suffered another bad day Wednesday, as shares and bonds continued their downward slide despite the government's latest attempt to relieve its debt financing burdens for this year.

By the end of the day's trading, the local stock market had plunged 4.3 percent to its lowest level this year, while Argentine bonds got a pounding by foreign investors, with the benchmark 2008 bond dropping 2.5 percent.

On top of this, Argentina's country risk - a gauge of investor confidence in buying Argentine bonds - rose by 83 points to 1,691 points, one of its highest levels ever and well above the ratings of other emerging economies like Ecuador, Russia and Turkey.

All this came despite a steady stream of positive news emanating from Argentina's political world this week. On Sunday, Congress finally passed the "zero deficit" bill, that will cut spending by $1.5 billion and legally oblige the government to balance its monthly budgets from now on.

[snip]

"The market's not buying the spending cuts," Bruce Pan, Latin America currency strategist at BNP Paribas in New York told Dow Jones Newswires, adding the market was trading at "distressful levels."

[snip]

With the bad news intensifying, people have been withdrawing their money from bank accounts, fearing the worst. Bank deposits dropped $6.1 billion in July alone - a 7.2 percent drop on the total - causing growing concern as to the stability of the banking system and people's savings.

[big snip]

[full story at link below]

News Copyright © 2001 Interest!ALERT All rights reserved.
This material may not be published, broadcast, rewritten or redistributed.

-----