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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: Justa Werkenstiff who wrote (5274)5/21/1999 4:14:00 PM
From: Justa Werkenstiff  Read Replies (1) of 15132
 
Okay thread -- time to assume Argentina watch:

Soros says forex peg cause of Argentine recession


CHICAGO, May 21 (Reuters) - Financier George Soros said on Friday that Argentina's recession is the price that the Latin American country is paying as a result of its currency board system.

"Brazil and other countries have devalued," Soros told Reuters at the Federal Reserve Bank of Chicago conference on Global Financial Crisis and Economic Development.

"The Argentine peso being tied to the dollar makes it probably an overvalued currency which they have to pay for with a recession," Soros said.


Soros said Brazil has not yet seen much benefit from the devaluation of its currency, the real, but he said some improvements should be expected in the months ahead.

"Brazil's trade balance has not improved very much," Soros said, when asked about the impact of Brazil's currency devaluation on its economy. "With the passage of time, exports should pick up," he added.

Soros earlier detailed his views about reforming the global financial system and warned, "the next crisis is bound to originate from a different direction...a rise in interest rates or a decline on Wall Street. The next test is liable to come when one of those events occurs."

Soros, however, declined to say whether he expected the Fed to raise interest rates in the near-term.

15:58 05-21-99
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