BUENOS AIRES, March 1 (Reuters) – Argentine President Cristina Fernandez on Monday scrapped a decree to tap $6.6 billion in foreign reserves to help honor public debt this year, but ordered the use of reserves to pay multilateral lenders.
In her state of the union address to Congress, Fernandez said she had signed a new decree allowing the use of about $4 billion of central bank reserves to pay lenders such as the World Bank and the Inter-American Development Bank.
A government source said the monetary authority had started transferring the funds to the Treasury, while opposition parties said they would ask the courts to freeze the new decree.
Fernandez’s initial bid to transfer part of the country’s $48 billion in foreign reserves into a fund had been blocked by the country’s courts and opposed by the former central bank chief Martin Redrado, who the president then fired.
The bank is now controlled by a close government ally.
The government was also expected to tap the reserves to pay some $2 billion of debt with multilateral institutions coming due this year.