From: "Walter Lippmann" <[EMAIL PROTECTED]> Reply-To: [EMAIL PROTECTED] Date: Wed, 8 Aug 2001 09:12:35 -0700 To: "CubaNews" <[EMAIL PROTECTED]> Subject: [CubaNews] Argentines wary of banks hide cash Published Wednesday, August 8, 2001 in the Miami Herald Argentines wary of banks hide cash in safes, yard BY MICHAEL SMITH Bloomberg News BUENOS AIRES -- Argentines, who are draining $220 million a day from their bank accounts, are hoarding money at home -- in safes, dirty laundry and under ground. Argentina's biggest safemakers say sales are surging, with Cajas de Seguridad Trella expecting customers to buy 200 safes this month, double the average. Argentines unable to afford in-home safes, which sell for as much as $3,000, say they've buried cash in their backyard, hid it in ovens or stuffed it into hampers. ``People are taking precautions against a collapse,'' said Domingo Tremelite, co-founder of Cajas de Seguridad Trella. Argentines have become skittish about keeping money in banks on concern the government may freeze accounts to stem the outflow of capital and avoid default on $130 billion of debt. The country's cash and gold reserves have fallen 25 percent since the end of June, dropping $690 million on Friday alone to total $15.7 billion. In downtown Buenos Aires, about 65 people lined up to withdraw dollars at state-owned Banco de la Naci�n's main branch in Buenos Aires after another of the bank's branches said it had run out of the U.S. currency. ``A lot of people are worried the banks are going to fall so they'd rather have dollars at home,'' said Alejandra Gaba, 26, a customer sales representative for a mobile phone company. At the same time, the International Monetary Fund's agreement to speed up a $1.2 billion loan payment eased concern the government would miss debt payments in the next two months. Argentina's benchmark floating rate bond rose 2 to an offer price of 68.625 to yield 30.4 percent. The yield has climbed from about 17.5 percent at the start of last month on concern the government may default. Analysts say they're focused on the rate of bank withdrawals as they try to determine if the government can keep the peso pegged at a one-to-one rate against the dollar and avoid default. In Argentina, the dollar is used as a second currency to the peso, accepted by stores and restaurants and available at any bank automated teller machine. Deposits at nongovernment Argentine banks have dropped by 7.6 percent, or $5.6 billion, from their three-month peak on July 4. On Aug. 2, the most recent figures available, bank deposits fell by $125 million. Buying a safe is among the most expensive options for Argentines afraid to keep their money in banks. A simple lock box can cost $100 in Buenos Aires, and high-end models can go for as much as $3,000. Home safe producers say customers are buying everything from lock boxes to fireproof safes with digital combinations. Talleres Fenix in Buenos Aires said sales of safes have jumped 28 percent since April. Home safemakers haven't seen such a surge in sales since just before the country fixed the peso to the dollar to tame hyperinflation in 1991. Instead of putting their paychecks in the bank, Argentines crammed dollars into safes as a hedge against soaring prices and a falling currency. After the new currency system started, Argentines started pulling cash from their safes, and putting it into banks, said Ferm�n Garc�a, a partner at Talleres Fenix. Now, the failure the government's struggle to keep the fixed exchange rate in place is drumming up new business for Argentina's safe dealers, he said. ``This isn't the first time this has happened, this total lack of confidence in the banks or the financial system,'' said Tremelite. ``It seems to be an illness here that keeps coming back.'' _________________________________________________ KOMINFORM P.O. Box 66 00841 Helsinki Phone +358-40-7177941 Fax +358-9-7591081 http://www.kominf.pp.fi General class struggle news: [EMAIL PROTECTED] subscribe mails to: [EMAIL PROTECTED] Geopolitical news: [EMAIL PROTECTED] subscribe: [EMAIL PROTECTED] __________________________________________________
