By Jorge Otaola
BUENOS AIRES, Jan 12 (Reuters) – A U.S. judge has frozen accounts held by Argentina’s Central Bank in the U.S. Federal Reserve, deepening a legal dispute over the Argentine government’s plan to use foreign reserves to repay debt.
Speculation has grown in Argentina in recent days that some holders of defaulted government bonds could try to get Central Bank funds embargoed because of a plan to use $6.6 billion in Central Bank foreign reserves to service the nation’s debt.
“The funds that the central bank has in the (U.S.) Federal Reserve have been embargoed,” an Argentine Central Bank spokesman said.
The move was initiated by U.S. District Court Judge Thomas Griesa, who is handling a series lawsuits brought by so-called bondholders, the spokesman said.
The news sent locally traded Argentine bonds tumbling 2.2 percent on average.
President Cristina Fernandez fired Central Bank chief Martin Redrado last week after he opposed her reserves plan, but a federal judge reinstated him a day later and blocked the transfer of the funds to the treasury.
